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August 4, 2003
The Ohio Department of Insurance will conduct a review of Ohio insurance
companies to inquire about the industry's current use of credit scoring
and how companies are moving toward complying with a new regulation that
went into effect June 12, 2003.
The Joint Committee on Agency Rule Review (JCARR) approved the new
regulation in May. The rule prohibits insurance companies from using a
consumer's credit score as the sole criterion for rating or underwriting
personal auto and homeowners insurance policies. The new rule will also
require that certain disclosures be made to consumers by insurers,
including an explanation of credit report findings that can contribute
to a higher rate or rejection of coverage.
Companies must be in full compliance by Sept. 12. The review will begin
in August and consist of a sample of randomly selected companies
licensed to conduct business in Ohio.
The department will analyze companies' policies and procedures in
relation to the use of credit scores in the underwriting and ratemaking
process and how insurers are preparing to comply with the new
regulation. If necessary, the department may further review insurance
companies' credit scoring practices.
URL:
www.insurancejournal.com/news/newswire/midwest/2003/08/04/31165.htm
May 30, 2003
The Ohio General Assembly's Joint Committee on Agency Rule Review
accepted an administrative rule sought by the Ohio Department of
Insurance regarding an insurance company's use of a consumer's credit
score for personal automobile and homeowners insurance.
"Credit scores" are numbers or ratings that insurance companies use for
the purpose of predicting the future insurance loss exposure based in
whole, or in part, on the consumer's credit history, creditworthiness,
credit standing or credit capacity.
The rule prohibits insurance companies from using a consumer's credit
score as the sole criterion for rating or underwriting personal auto and
homeowners insurance policies. The rule also will require certain
disclosures be made to consumers, including an explanation of what
factors in their credit report have contributed to a higher rate or
rejection of coverage.
It will go into effect in September 2003.
URL:
www.insurancejournal.com/news/newswire/midwest/2003/05/30/29404.htm
Ohio Housing
Conference to Zero in On Scoring
March 4, 2003
An Ohio Civil Rights Commission (OCRC) housing conference will host
several panel discussions about the impact of insurance scoring on access
to homeownership in the state.
Three sessions dealing with different issues regarding housing and scoring
will be held during the
conference, which will take place in Columbus, Ohio March 31 to April 1.
1. Insurance credit scoring — an introduction, "What is Credit Scoring?"
Birny Birnbaum, executive director of the Center for Economic Justice and
author of the recent study for the CRC on insurers' use of consumer credit
information in Ohio, will provide an introduction to insurance credit
scoring.
The session will include an overview of insurance underwriting and
pricing, a description of insurers' traditional methods of risk
classification for homeowners insurance and a review of how insurers use
consumer credit information to decide whether they will offer a consumer a
policy and, if so, how much it will cost.
The session will also review some of the issues in the current controversy
over insurance credit scoring, such as unfair discrimination against poor
and minority communities, and provide a foundation for the credit scoring
panel discussion to be held later that day at the conference.
2. Insurance credit scoring — "Debating the Impact on Insurance Policies."
OCRC Director of Enforcement and Assistant Chief Legal Counsel Matt Miko
will moderate a panel of experts on insurance credit scoring.
The experts will share their views generally on insurers' use of consumer
credit information and specifically on the hot controversies involved in
insurance credit scoring and whether the insurers' use of credit scoring
will have an impact on protected classes, with emphasis on discrimination
in the sale of homeowners insurance.
Presenters will include Birny Birnbaum, executive director for the Center
for Economic Justice, Austin, Texas; David F. Snyder, vice president and
assistant general counsel for the American Insurance Association,
Washington, D.C.; Stephen M. Dane, attorney, Cooper & Walinski, Toledo,
Ohio; Joe Thesing, state advocate, National Association of Mutual
Insurance Companies, Indianapolis, Ind.; and the Office of the Ohio
Department of Insurance.
3. Insurance redlining: Unavailability of insurance information. OCRC
Regional Director Darlene Newbern will moderate a panel of experts on
insurance redlining. The experts will provide information aimed at getting
a better understanding of insurance redlining and the adverse consequences
caused by insurance redlining.
The experts will also provide information on the lack of sufficient
geographical information on the distribution of insurance products, as
well as whether such information would benefit the consumer as well as the
insurance industry.
Presenters will include Gregory D. Squires, chair and professor of
Sociology, George Washington University, Washington, D.C.; and Edward G.
Kramer, executive director, the Housing Advocates, Inc., Cleveland, Ohio.
To register for the conference, visit:
www.state.oh.us/crc/hconf.htm.
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