Use of Credit History in Rating Prohibited for 3 Years

In December, Commissioner Kriedler required carriers with over $1 million in annual premium to complete a survey providing information on the impact of credit scoring on insureds premiums. On February 1, the department adopted a rule for all carriers providing homeowners, renter’s, and private passenger auto policies prohibiting the use of credit history to determine rates, premiums or eligibility for coverage. This is a temporary prohibition which will be in effect for three years following the date of the national or state declared state of emergency  concerning the COVID -19, whichever ends first. The rule becomes effective March 4. A copy of the explanatory statement for the rule can be found here.

The commissioner is also proposing a new transparency in underwriting rule that would require carriers to provide notice to consumers of all factors used in underwriting, as well as the weight at which those factors are used.  Written comments on this proposed rule are being accepted through March 1, 2022. A copy of the proposal can be found here.