MARYLAND ADDRESSES CREDIT SCORES:

A recent report issued by the Maryland Insurance Administration (MIA) on the use of credit-based insurance scoring found no basis for any conclusion that credit history is skewed toward ethnic minorities or low-income individuals. The study actually indicates that there is insufficient data to conclusively determine whether the use of credit scoring by insurers has an adverse impact on low-income or minority populations. According to the MIA, this is due, in part, to the fact that insurers do not collect information regarding an applicant’s race or income. The MIA added that it has “neither the data nor the information needed to reach a definitive conclusions regarding the impact of the use of credit scoring by insurers on low-income and minority populations.” It will continue to monitor the personal lines insurance market based on consumer complaints, market conduct investigations and data collection by zip code in order to determine if the use of credit history has an adverse impact on low-income or minority populations. In addition, the MIA will be participating in a multi-state study initiated by the Missouri Department of Insurance to determine the impact of credit scoring on minorities and low-income populations. The Property Casualty Insurers Association of America reacted by issuing a bulletin claiming that said the study “provided no conclusive evidence” that insurance scores are anything less than objective, accurate underwriting and rating devices benefiting most policyholders with lower premiums.