So who is "on your side"?
Several Organizations oppose the use
of insurance credit scoring:
John
Bryant, Agent Champion, is Terminated
John Bryant was an agent for a very
large insurer. He treated his clients the way they deserve to be treated
and even went to bat for them in the game of "insurance credit
scoring". He was terminated for his efforts. See
what he is doing now.
The
Center for Economic Justice
"David "Birny" Birnbaum,
of the Center for Economic Justice, recently said, "There has been
no comprehensive independent [emphasis added] study of a link
between credit problems and car accidents. The industry is accepting
"statistics’ from the company that provides that information and
programs!" 1.
The
National Association of Professional Allstate Agents
The
National Association of Professional Allstate Agents (NAPAA) has
studied the issue of "credit scoring," or "insurance
scoring," and because Allstate was one of the earliest users of
credit scoring algorithms to underwrite and rate insurance policies,
Allstate insurance agents have the most experience dealing with this
system and its adverse effect on our customers. Our conclusions based
on this unique experience are:
o
It is a secret methodology, not subject to examination by Insurance
Commissioners, which affects the premium and/or acceptance of
insurance applicants and existing customers.
o Credit scoring appeared when insurance companies were denied the
ability to overtly Redline geographical areas and certain minority
groups.
o Credit scoring is a new method of Redlining meant to replace the
old method.
o Particularly affected
are minorities, low-income groups, senior citizens and others who
rarely, or never, make use of credit. Other affected people are
those who have had divorces, the death of a spouse, large medical
bills or even those who check their own credit regularly to be sure
the information is accurate.
o The insurance/credit score is a moving target - Today one may have
a "score" of 4, next month a score of 2. The consumer just
has to hope they get lucky when they apply, because they are stuck
with whatever the score happens to be at that time, with no
possibility of improvement, for the life of the policy.
o Credit scoring allows a company to take rate increases at their
sole discretion by merely adjusting their never examined and secret
algorithm by changing the weighting of certain values.
Credit
scoring for insurance is not socially acceptable. It violates
the values Americans hold dear. The American way is to be judged on
those things that are directly relevant to the subject: Tickets,
accidents, vehicle usage etc. for auto insurance and condition of
premises, past losses and upkeep etc. for property insurance. Credit
scoring for insurance purposes is Redlining. NAPAA strongly opposes
Redlining, thus we have no choice but to oppose credit scoring.
United
Farmers Agents Association
"Our
industry struggles with a bad reputation already. The misuse of credit
scoring will further erode consumer confidence. It’s time for the
industry to step up and commission an independent study of the
relationship between credit and future losses. It’s time for the
industry to force the release of the rating factors in the FICO
programs. Its time to change the rules so consumers can get specific
answers about their scores."
The National Association of State Farm
Agents, inc. (NASFA) hereby resolves that we are opposed to any
insurance company using credit scoring for the purpose of Property
& Casualty underwriting and rating. We further support legislation
to prohibit credit scoring for the purpose of Property & Casualty
underwriting and rating. We believe this form of underwriting is
profiling clients who would otherwise be eligible for Property &
Casualty business.
The
Coalition of Exclusive Agent Associations
Credit
Scoring
POSITION STATEMENT
Adopted March 11,2002
“In
the absence of full and good faith disclosure to the consumer and
appropriate state insurance officials of all weighting factors and the
respective percentage(s) or importance of their weighting, the CEAA
opposes the use and consideration of credit status and/or credit scoring
in any manner in connection with the acceptance, rejection, renewal or
determination of insurance coverage or with respect to the determination
of insurance rates and/or rate increases. It is the position of CEAA
that credit information, written or otherwise, should not be given any
consideration as a basis for determining the acceptance1
rejection or renewal of insurance coverage or insurance rates.”
National
Auto Agents Alliance
"The National Auto Agents Alliance
recently issued a statement that credit scoring is "unreliable,
inaccurate, and so against public interest as to endanger the insurance
industry to the wrath of the public... The
NAAA feels that credit scoring may even suggest a level of redlining
that segments insureds into "haves and have-nots."
New
Position Letter of the NAAA
National
Association of Insurance Commissioners
"In a White Paper issued recently
by the NAIC, which now wants this credit scoring practice monitored, it
was suggested that insurers not be allowed to deny policies based
solely on credit reports. It also recommends that the industry
develop objective, verifiable guidelines for ordering credit
reports"
