Denver – The Colorado House of Representatives defeated H.B. 1143, a proposal to ban the use of credit-based insurance scores. The bill was narrowly voted out of the House Business and Labor Affairs Committee last week by a vote of 6-5.
“The Colorado House of Representatives carefully weighed the merits of this very predictive tool, and wisely decided to allow Coloradans to benefit from the use of credit scores and insure consumers pay accurate rates for both homeowners and auto insurance,” says Fred Bosse, VP, southwest region for the American Insurance Association (AIA). “The Colorado legislature passed a comprehensive law in 2004 that has strong consumer protection and disclosure laws on insurance credit scoring. It protects people who have no credit history, debt due to divorce, identity theft and even medical collections.”
Bosse says that banning credit scoring would punish low-risk consumers by subsidizing those who are a higher risk. “If H.B. 1143 had passed and become law, a large percentage of Coloradans could have paid more for their insurance and subsidized those who pose a greater risk to their insurance company,” he says.
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