Washington — This week’s decision by the Federal Trade Commission (FTC) to order nine major insurance companies to provide data for a study of credit-based insurance scoring and homeowners insurance is unnecessary and a waste of money, according to the National Association of Mutual Insurance Companies (NAMIC).
“We are disappointed that the FTC decided to use the compulsory process and we don't expect the findings to be any different than the first study,” says Jimi Grande, NAMIC’s VP for federal and political affairs. “The evidence has shown time and again that the use of credit-based insurance scoring benefits the majority of insurance consumers through lower premiums.”
A similar study of auto insurance by the FTC last year corroborated previous results showing credit-based insurance scoring is an effective underwriting tool. In addition to the FTC, the Federal Reserve and several state insurance departments have undertaken similar studies in recent years.
“No matter how many studies are conducted on the use of credit-based insurance scoring, the results are consistent,” Grande says. “Study after study after study has clearly indicated that allowing insurers to use the full gamut of effective and accurate underwriting tools, such as credit-based insurance scoring, results in pricing that better reflects the risk and leads to discounts for the majority of insurance consumers.”
Grande says forcing insurers to provide data for this latest study won’t change the facts about credit-based insurance scoring proven in previous studies. “They all conclude that credit based insurance scoring benefits consumers and is not unfairly discriminatory,” he says. “Conducting the same studies over and over trying to get the result you want seems to be an exercise in futility.”
Source: National Association of Mutual Insurance Companies
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access