Atlanta - The use of credit information in underwriting and rating Florida homeowners and auto insurance policies is now threatened by yesterday's approval of a rule governing insurers' use of credit-based insurance scores, according to the American Insurance Association (AIA)."While the legislature passed a law in 2003, specifically authorizing the use of credit information for insurance underwriting and rating, today's administrative action by the Florida Cabinet may effectively ban insurers' use of credit information," said Cecil L. Pearce, AIA vice president, Southeast Region.
The rule, proposed by the Office of Insurance Regulation (OIR), goes far beyond what other states have done by requiring insurers who use credit information to meet a new "disproportionate effect" standard. The rule will require insurers to demonstrate that there is no "disproportionate effect" on consumers when credit information is used in underwriting and rating.
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