FIGHT OVER CREDIT BAN MOVES TO COLO. SENATE:

Legislation that would prohibit insurers’ use of credit information narrowly advanced out of the Colorado Senate State Affairs Committee on a 4-3 vote and will be opposed by the insurance industry on the Senate floor, according to the Property Casualty Insurers Association of America. Earlier this session, the insurance committees in both the Colorado House and Senate defeated bills that would have banned insurers’ use of credit information. However, a third bill, SB 195, was introduced and assigned to the State Affairs Committee, which includes many legislators who were more inclined to oppose insurers’ use of credit information. “Senate Bill 195 will be vigorously opposed by the insurance industry on the Senate floor,” said Michael Harrold, assistant vice president and regional manager for PCI. “This legislation is unfair to consumers who are less likely to file a claim and should pay lower premiums. Legislators on the insurance committees recognized that most of their constituents would be harmed by a ban on credit information and rejected measures that would ban insurance scoring.” Colorado adopted the National Conference of Insurance Legislators Model Insurance Scoring Act, which allows insurers to use credit information and requires companies to notify applicants for insurance that credit information will be used for underwriting or rating. The law prohibits insurers from denying, canceling or non-renewing policies solely on the basis of credit information. “This legislation would also be disruptive to Colorado’s automobile insurance market, which is adjusting to the tort-based automobile insurance system,” Harrold said.