an interesting development in the debate over credit scoring, an insurance-industry practice that Washington state Insurance Commissioner Mike Kreidler is trying to ban.
Some background: Many insurers now pull your credit information and use that as a key factor to determine your rates for insurance, including auto- and homeowners' coverage. Kreidler argues that the data has nothing to do with how you drive or care for your home; the companies that use it argue that credit is valuable information that's closely correlated with claims and risk.
This morning, Los Angeles-based Workmen's Auto Insurance Company issued a press release saying that it supports the ban and "has never used an individual's credit when considering their eligibility or determining their insurance premium."
Rabu, 27 Januari 2010
Insurance news: Earthquake `mortgage' insurance: worth the cost for those who can't get earthquake coverage?
That was the topic of a Northwest Cable News report last night. Point to remember, though: It's not a substitute for true earthquake coverage, which can be pretty cheap even in the earthquake-prone Northwest.
Selasa, 26 Januari 2010
Kreidler, Gregoire to Congress: Don't give up on health care reform
Washington state Insurance Commissioner Mike Kreidler joined Gov. Chris Gregoire Monday to call on Congress to push ahead with health care reform:
"We have an unsustainable system. It's only getting worse. The numbers are getting worse. We have an opportunity now to make a huge difference. Congress must act in order to address this issue or we've lost our window of opportunity for another generation."
"We have an unsustainable system. It's only getting worse. The numbers are getting worse. We have an opportunity now to make a huge difference. Congress must act in order to address this issue or we've lost our window of opportunity for another generation."
Kamis, 21 Januari 2010
Credit scoring hearing: Nearly four hours of testimony
The Washington state House Financial Institutions and Insurance Committee's two-hour hearing on a credit-scoring ban stretched to nearly four last night, with 9 pages of people signed up to testify.
"There's a lot of interest in this little bill," said Rep. Steve Kirby, D-Tacoma.
Insurance Commissioner Mike Kreidler is trying to ban the use of credit scoring by insurance companies, on the grounds that your credit history has nothing to do with how you drive or how you maintain your home. (The scores are widely used to set rates for auto- and homeowners' coverage.) Especially in this economy, Kreidler argues, it's flatly unfair to charge policyholders more simply because of their credit history. On Wednesday night, consumers described being penalized for what most would consider responsible actions, such canceling a credit card.
Here's a one-minute excerpt from Kreidler's testimony:
(To hear the rest of the testimony, including that of consumers and insurance industry officials, click on the play icon again when the video pauses.)
"There's a lot of interest in this little bill," said Rep. Steve Kirby, D-Tacoma.
Insurance Commissioner Mike Kreidler is trying to ban the use of credit scoring by insurance companies, on the grounds that your credit history has nothing to do with how you drive or how you maintain your home. (The scores are widely used to set rates for auto- and homeowners' coverage.) Especially in this economy, Kreidler argues, it's flatly unfair to charge policyholders more simply because of their credit history. On Wednesday night, consumers described being penalized for what most would consider responsible actions, such canceling a credit card.
Here's a one-minute excerpt from Kreidler's testimony:
(To hear the rest of the testimony, including that of consumers and insurance industry officials, click on the play icon again when the video pauses.)
Jumat, 15 Januari 2010
Kreidler and state lawmakers propose ban on "credit scoring" by insurers
Washington state insurance commissioner Mike Kreidler and state lawmakers are pushing for a ban on the insurance industry's controversial practice of credit scoring.
Eight years ago, the legislature passed a law restricting the industry's use of certain factors in your credit history -- such as absense of credit and the number of credit inquiries. Today, your credit history is one of the largest factors in determing your rate. Kreidler believes the practice is inherently unfair -- especially in today's economy.
A hearing on House Bill 2513 is set for Wednesday at 6 p.m. in the John L. O'Brien Bldg., hearing room D.
To learn more about this bill and how insurers use you credit, check out our special credit scoring page.
Eight years ago, the legislature passed a law restricting the industry's use of certain factors in your credit history -- such as absense of credit and the number of credit inquiries. Today, your credit history is one of the largest factors in determing your rate. Kreidler believes the practice is inherently unfair -- especially in today's economy.
A hearing on House Bill 2513 is set for Wednesday at 6 p.m. in the John L. O'Brien Bldg., hearing room D.
To learn more about this bill and how insurers use you credit, check out our special credit scoring page.
Kreidler: New law would help preserve flood insurance market in the Green River Valley
Washington state insurance commissioner Mike Kreidler urged state lawmakers this week to approve the creation of a joint underwriting association in the rare cases where a flood insurance market dries up, leaving businesses struggling to find coverage.
"You're going to hear that there isn't a need for this legislation because there's adequate insurance that's out there already," Kreidler told lawmakers at a recent hearing. "...I'm fully convinced, from every evidence that I have, that there is not an adequate market out there for the Green River Valley."
A weakened abutment beside the Howard Hanson Dam, in south King County's Green River Valley, has led to a 1 in 33 chance of serious flooding in the heavily developed valley below the dam, according to the Army Corps of Engineers. (The dam is not believed to be at risk of failure. The flood risk comes from the fact that the Corps may have to release more water than normal to avoid stressing the dam.)
In the wake of that news -- and earlier estimates pegged the risk as high as 1 in 3 -- the market for flood insurance appears to have tightly contracted. And according to the Corps, it could be 7 years before the dam is fully repaired.
Local lawmakers are trying to pass legislation that would allow Kreidler to set up a joint underwriting association, a group of insurers who agree to underwrite and sell flood coverage.
"We must move quickly on this bill to protect our area from an economic crisis caused by the potential threat of flooding," Rep. Tina Orwall, D-Des Moines, said in a press release this week.
"You're going to hear that there isn't a need for this legislation because there's adequate insurance that's out there already," Kreidler told lawmakers at a recent hearing. "...I'm fully convinced, from every evidence that I have, that there is not an adequate market out there for the Green River Valley."
A weakened abutment beside the Howard Hanson Dam, in south King County's Green River Valley, has led to a 1 in 33 chance of serious flooding in the heavily developed valley below the dam, according to the Army Corps of Engineers. (The dam is not believed to be at risk of failure. The flood risk comes from the fact that the Corps may have to release more water than normal to avoid stressing the dam.)
In the wake of that news -- and earlier estimates pegged the risk as high as 1 in 3 -- the market for flood insurance appears to have tightly contracted. And according to the Corps, it could be 7 years before the dam is fully repaired.
Local lawmakers are trying to pass legislation that would allow Kreidler to set up a joint underwriting association, a group of insurers who agree to underwrite and sell flood coverage.
"We must move quickly on this bill to protect our area from an economic crisis caused by the potential threat of flooding," Rep. Tina Orwall, D-Des Moines, said in a press release this week.
Insurance news: Health care deal "very close", and MA motorcyclists to get insurance rebates
In health-care reform news, the New York Times reports that a health care deal is very close and that late-night negotiations have been focused on the costs of the plan.
In Massachusetts, meanwhile, EnterpriseNews reports that many of the state's motorcyclists stand to get rebates under settlements with insurers. The alleged overcharges totaled $11 million.
In Massachusetts, meanwhile, EnterpriseNews reports that many of the state's motorcyclists stand to get rebates under settlements with insurers. The alleged overcharges totaled $11 million.
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