NAIC Adopts Credit Scoring Regulatory Options Paper

The Credit Scoring Working Group of the National Association of Insurance Commissioners (NAIC) has adopted a list of options
for states to consider when reviewing insurance credit scoring proposals as well as a consumer brochure that will be distributed to state insurance departments.

The Working Group took action during a recent conference call, making only minor modifications to the options list and the consumer brochure that had been redrafted after the Winter Meeting in San Diego in December.

The National Association of Independent Insurers (NAII) participated in the conference call, citing its concern with the inclusion of a question regarding whether credit scoring disproportionately affects minorities and low income
consumers. NAII and another trade industry representative objected to the inclusion of the question because there is no solid evidence to suggest that the use of credit scoring has a disproportionate affect on economically disadvantaged individuals or minorities. The working group rejected the objection and kept the question in the brochure.

“The final product of the credit scoring working group was as expected” NAII vice president Samuel Sorich said. “At this juncture NAII is grateful that we were allowed the opportunity to provide input and we look forward to participating with this working group as it addresses other issues during the coming year.”

Sorich also added that the working group announced during the conference call that the final version of the brochure and options paper would be made available to state insurance departments in the next several weeks.