Washington — The use of credit scores is a vital to effectively price business, a member of the insurance industry told a Congressional committee.
“Insurers that consider credit information in their underwriting and pricing decisions do so for only one reason—insurance scoring allows them to rate and price business with a greater degree of accuracy and certainty,” said Charles Neeson, senior executive, personal lines for Westfield Center, Ohio-based Westfield Insurance, who was testifying on behalf of the Property Casualty Insurers Association.
Neeson said credit-based insurance scoring is an effective tool for insurers, and a fair one for consumers.
“To protect competition and consumer choice, it is imperative that insurers be permitted to fully price risks using nondiscriminatory and statistically valid tools such as credit-based insurance scores,” he said. “Sound underwriting allows insurers to write more business—a direct benefit for consumers.”
Source: Property Casualty Insurers Association
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