Congress Questions Use of Credit Scores in Underwriting

On Wednesday, a subcommittee of the U.S. House of Representatives Financial Services Committee held a hearing entitled: “Examining Discrimination in the Automobile Loan and Insurance Industries.”

The Big “I” shares Congress’s interest in protecting consumers from discriminatory practices. But as a staunch supporter of the state-based system of insurance, the association believes state regulators are in the best position to address these concerns in their respective markets.  The Big “I”, along with a number of other property-casualty trade associations, submitted a letter to the committee detailing this position.

More specifically, ahead of the hearing, Rep. Rashida Tlaib (D-Michigan) introduced legislation that would prevent the use of credit scoring in the underwriting process for auto insurance. Currently, of course, credit scores are one of many tools used in the underwriting process, and the introduction of this legislation was one of the main catalysts for this hearing.

The Big “I,” along with its industry partners, opposes the legislation on the basis that this matter should remain solely in the purview of state insurance regulators.

The Big “I” looks forward to continuing to work with Congress, Chairwoman Maxine Waters (D-California), and Ranking Member Patrick McHenry (R-North Carolina) to protect consumers while also preserving the state-based system of insurance regulation.

Joseph Cortina is Big “I” director of federal government affairs.