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NCOIL Approves Insurance Score Model

During its Fall National Meeting, the National Conference of Insurance Legislators (NCOIL) approved model legislation on the use of insurance scores. PIA joined with...
November 25, 2002

During its Fall National Meeting, the National Conference of Insurance Legislators (NCOIL) approved model legislation on the use of insurance scores.  PIA joined with others property and casualty trade associations to negotiate compromise language that satisfied differing concerns.

The NCOIL model includes the following provisions:

  • Insurers cannot deny, cancel, nonrenew, or base a policyholder's renewal rate on credit data without considering other factors;
  • Consumers must be informed that their credit histories may be checked in connection with an application for insurance;
  • Insurers must give consumers the specific reason or reasons that an adverse action was taken against them based on credit;
  • nsurers may not use factors like age, income and address in calculating credit-based insurance scores, and certain inquiries and items found on a consumer's credit report (i.e., those that are coded as medical in nature).

As many as 30 states may consider insurance scoring legislation during their upcoming sessions.