Credit Scoring

Insurance companies often use consumer credit information in determining if they will offer a consumer a residential property insurance policy and how much that policy will cost. Insurance credit scoring is used in a variety of ways – for underwriting (including rating tier selection), rating (or premium development), coverage eligibility, marketing, and payment plan eligibility.

The insurance industry claims there is a clear correlation between bad credit and increased insurance risk and argues that use of consumer credit information allows insurers to determine a fairer pricing structure. Although a correlation does exist, the use of credit reports as beneficial to consumers has yet to be determined.

 

Committees Active on This Topic
Property and Casualty Insurance (C) Committee
Market Regulation and Consumer Affairs (D) Committee

Financial Condition (E) Committee

News Releases
NAIC Holds Public Hearing on Credit Rating System
9/29/09
NAIC to Hold Public Hearing on Credit Rating Agencies
9/9/09
Insurance Regulators to Hold Hearing on Credit Scoring
4/23/09
Consumers and Credit: Regulator Hearing to Review Concerns
3/16/09
NAIC Testifies on the Use of Credit-Based Insurance Scores
5/21/09
States Work to Protect Consumers Against Credit Scoring
10/3/07
States, Industry Reach Agreement on Credit Scoring Study
8/4/04
Additional Resources

Sept. 24, 2009 Public Hearing
ROLE OF RATING AGENCIES IN STATE INSURANCE REGULATION

NOTE: Due to technical difficulties at the facility, audio begins approximately 15 minutes after the session begins (see materials for available text).

  • MP3 Audio 1 (24 mins, 11-meg)
    -End of Chris Evangel through Birny Birnbaum
  • MP3 Audio 2 (39 mins, 18-meg)
    -Eric Steigerwalt & Panel 1 Q&A
  • MP3 Audio 3 (63 mins, 30-meg)
    -Panel 2-All Panelists
  • MP3 Audio 4 (60 mins, 28-meg)
    -Most of Panel 2 Q&A
  • MP3 Audio 5 (57 mins, 27-meg)
    -Remainder of Panel 2 Q&A, Mani Sabapathi through Matt Richardson
  • MP3 Audio 6 (68 mins, 32-meg)
    -Heather Brilliant through Michael Macchiaroli & Panel 3 Q&A

Materials

April 30 Public Fact-Finding Hearing on the Use of Credit-Based Insurance Scores

  Agenda and Written Testimony

  Listen to Audio from the Hearing

State Credit Scoring Reports

GAO Report on Consumer Credit Reporting Literacy