Saturday, August 2, 2003

What's the buzz?


Insurers told to follow rules

Two months after throwing her support behind industry-backed rules governing the use of credit reports by insurance underwriters, Ohio Insurance Director Ann Womer Benjamin is calling for strict compliance.

Benjamin said Friday that the state Insurance Department would run spot-checks beginning this month to make sure companies comply with the new credit-scoring rules by the Sept. 12 deadline.

The rules, which went into effect June 12, require insurers to give customers 30 days' notice of rate increases stemming from negative credit information. They also bar insurers from basing policy writing and pricing decisions purely on credit scores, although no companies are known to have done that.

"The use of credit scores in the insurance industry is a controversial practice which needs to be monitored," Benjamin said.

In June, the Enquirer told the story of a debt-free, credit-card-disdaining Kenneth Smith, a Mount Carmel man whose car insurance rates were raised 56 percent because of lack of credit history. A group of Ohio senators, led by Democrat Tom Roberts of suburban Dayton, introduced a bill to ban credit-scoring by insurance companies, but it died in General Assembly.

James McNair



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What's the buzz?