Massachusetts Enacts Law on Credit Ban

Massachusetts Governor Deval Patrick signed into law a bill that bans the use of credit in underwriting and rating private passenger motor vehicle insurance.

The ban has already been in practice in the state but as an administrative regulation. Now it has been codified into law.

“We want to commend the legislature and the Patrick Administration for their leadership and support on this important issue,” commented Frank Mancini, CEO of the Massachusetts Association of Insurance Agents.

Mancini’s group has been the driving force in the state behind putting the ban on using credit data into law. In October, the group dropped its effort to put the issue on the ballot in order to focus on their legislative effort.

The use of other socioeconomic factors such as education and income levels will continue to be banned in the state but as administrative regulations, as they have been in the past.

Massachusetts is already a state with some of the strictest bans in the nation regarding the use of credit and socioeconomic factors in underwriting.