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Bill allows insurers to consider credit scores

Posted: February 26, 2013 - 11:01pm

JUNEAU — Insurers would be able to consider someone’s credit score when renewing personal insurance policies under a bill in the Alaska Senate.

SB55, from the Senate Labor and Commerce Committee, was heard for the first time Tuesday. Currently, insurers can consider credit history when initially issuing a policy for things like car, renter’s or homeowner’s insurance. According to the sponsor statement, if consumers want their credit history used as part of a renewal today, they must request that.

A number of insurance companies support the measure. They say the current law results in higher premium rates and market disruptions, with consumers forced to switch carriers for rates that better reflect their risk.

Forty-seven other states allows insurance companies to look at credit history when reviewing a new policy application, but Alaska is the only one that doesn’t allow companies to consider that information when a policy is renewed, according to Kenton Brine, assistant vice president and Northwest regional manager for the Property Casualty Insurers Association of America.

“In most cases, most consumers have good enough credit that they either are not going to be affected by their credit score, or they’re going to pay less for insurance because they’re going to represent a better risk than they would if we didn’t use it,” Brine said.

Gary Strannigan, an associate vice president for public affairs at Liberty Mutual, told the committee that studies show that credit score is an accurate predictor of risk.

“From what I can surmise, people don’t partition off the responsible portions of their lives. They don’t say, ‘I’m going to be responsible with my finances but I’m going to let my roof rot,’” he said.

The Alaska Democratic party, on its Facebook page, called the measure “indefensible” and said it would allow companies charge Alaskans more for the same insurance based on credit score.

Sen. John Coghill, R-North Pole, also introduced a bill, SB 52, that would regulate insurance for consumer electronics.

“Because most electronic devices are sold through retailers who are not usually in the insurance business, and because most portable electronics insurance is sold where the devices are purchased, without regulation a chaotic market for such insurance has evolved,” Coghill said in a sponsor statement.

Both bills were held in committee.

Online:

SB55: http://bit.ly/YGjfvZ

SB52: http://bit.ly/13h1OYU

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robert white
378
Points
robert white 02/27/13 - 03:16 pm
0
3
insures

I fully support this concept, being in the insurance industry and having my wages correlated to premiums maybe I can buy that new BMW to set next to my Z1 corvette. Life is getting better, sorry little people!

Redbrdee
401
Points
Redbrdee 02/27/13 - 03:24 pm
2
0
Why is Senator Coghill sticking Alaskans with this?

I see....now that Senator Waggoner and a few others are gone the corporatist Republicans are going to use the government to allow corporations to just suck the citizens dry, cause medical expenses to increase and wreck the environment to name a few things (check out Senator Micciche's recent activities)....I guess I'll stop voting Republican. How are young people going to catch a break now? How are older people who lost their jobs in the recession through no fault of their own ever going to recover financially? Alaskan citizens, American citizens, either way we don't count to our politicians. It seems to me that the costs associated with unlimited corporate power in our lives are significantly higher than any tax increases created by Democrats.

Many people in rural Alaska simply don't use many credit services. This can cause a poor credit rating but these same people still have to insure their trucks, etc.

spwright
1376
Points
spwright 02/27/13 - 04:12 pm
1
2
One % er

Well I always thought that Robert White was a 1 %er
now his statement Proves It.

How's that Working Out for You Robert ? Are you laughing All the Way to the Bank while working in the Insurance Industry ?

SPW

cheapersmokes
767
Points
cheapersmokes 02/27/13 - 04:36 pm
1
1
Credit scores for insurance renewals

I say let them use anything they want to set their policy rates. We can always shop for a lower price but then they must also return 50% of the premiums paid for every year that a claim isn't filed!

akal
252
Points
akal 02/28/13 - 12:23 am
1
0
another corporate shill

people need to control what these sellouts are doing to us. the young people are having a tough time as it is they don't need more expense , the corporations are running this country down the tubes , stand up for the people.

robert white
378
Points
robert white 02/28/13 - 06:13 am
1
0
insures

sorry, my comment was ment as a point and was pure sarcasm....

Seafarer
1147
Points
Seafarer 02/28/13 - 05:30 pm
0
0
Disrespect Privacy

Why are these so-called "lawmakers" trying to hurt their constituents? My spouse and I have never used credit cards and so do not have a credit score. Why do we have to pay more? Use our driving records!

This is getting so soon the Rethugs will demand a Debtors Prison be built for us "deadbeats".

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