Okla. House Approves Credit Scoring Bill

The Oklahoma House recently approved a bill prohibiting insurers from using credit information as the sole basis for denial of homeowners or auto insurance coverage, according to the American Insurance Association (AIA).

“While AIA believes the use of credit information in insurance transactions is already sufficiently regulated by the federal Fair Credit Reporting Act and existing state rating laws,” said John Marlow, AIA assistant vice president, southwest region, “the bill does a good job of protecting consumers and addressing agent concerns while reinforcing the right of insurers to use this accurate and cost-effective underwriting tool.”

House Bill 1751, sponsored by Rep. Susan Winchester (R), passed the House by a vote of 99-1. The measure was then referred to the Senate, where it is sponsored by Sen. Glenn Coffee (R). The bill states that any insurer doing business in Oklahoma and using credit information to underwrite or rate risks could not:

• deny, cancel or refuse to renew a personal insurance policy “solely on the basis of credit information, without consideration of any other applicable underwriting factor” independent of the consumer’s credit rating;
• base renewal rates for personal insurance exclusively upon a customer’s credit rating;
• rely on an insurance score that is calculated using income, gender, address, zip code, ethnic group, religion, marital status, nationality, occupation, or disabilities and physical handicaps of the consumer, as a factor in its decision whether to extend or renew an insurance policy; or
• take an adverse action against a consumer just because he or she “does not have existing credit accounts, without consideration of any other applicable factor independent of credit information.”