You are here:HomeIssuesInsurance Scoring & Underwriting Issues2003PIA of New York President Testifies on Credit Scoring in Albany

PIA of New York President Testifies on Credit Scoring in Albany

PIA of New York President T.J. Derella said the positives and negatives of using credit scores in personal lines underwriting depend largely on the practices...
October 28, 2003

PIA of New York President T.J. Derella said the positives and negatives of using credit scores in personal lines underwriting depend largely on the practices of the company that is using them. Derella's comments were made at a public hearing held by a New York State Assembly committee. PIANY was asked to provide testimony on the insurance industry's use of credit-based scoring, the impact on consumers and whether its use in auto and homeowners insurance should be permitted. "I would compare credit scoring to the use of voicemail, which has evolved at about the same rate and over the same time period, from a novelty to a near-universal business tool," Derella told the committees. "Like voicemail, credit scoring can be perceived as fair and user-friendly, or arbitrary and baffling, depending on the way companies design its interface with the consumer."