TDI
Commissioner to Rule on Credit-Based Insurance Scoring
January 27, 2004
Statement from TCAIS Director Beaman Floyd
The January 7th hearing at the Texas Department
of Insurance (TDI) in Austin drew a number of witnesses who
agree that Texans should pay insurance premiums that reflect
their own personal risk and that lower-risk consumers shouldn’t
have to subsidize higher-risk consumers.
Texas Insurance Commissioner Jose Montemayor listened intently
as citizens, insurance agents and TCAIS Executive Director
Beaman Floyd testified about how Texas consumers benefit
from the use of credit information and how they would be penalized
if credit-based insurance scoring is restricted. Witnesses
informed the Commissioner that credit-based insurance scoring
is an objective tool that allows insurers to more accurately
assess risk and price premiums accordingly. Any restriction
is bad policy and the large majority Texas consumers will
pay
the price.
A so-called “consumer representative” testified
that the use of credit-based insurance scoring should be
limited, even though this would mean lower-risk consumers
would see
their rates increase. However, when asked by the Commissioner
for data to support his position, the witness was unable
to deliver. When asked about the possibility of lower-risk
consumers’ rates
increasing, the witness was again unable to explain, “Whose
rates should go up and by how much.” The “consumer” witness
said he didn’t know.
We were encouraged to read the
following quote from the Commissioner in a major daily newspaper: "I
don't want an arbitrary setting of a number resulting in
millions of Texans paying
more for their insurance policies." (Fort Worth
Star-Telegram,
January 8, 2004.)
To read more news clips from the hearing,
please click here:
http://www.tcais.org/media/news/index.php
To read Beaman Floyd’s testimony, please click here:
http://www.tcais.org/media/releases/Final_Credit_Scoring_
Testimony_by_TCAIS_1_7_04.pdf
Thank
you again to those of you who sent letters expressing your
opposition to restrictions on the use of credit information.
Please continue to visit www.tcais.org so we can keep
you informed about this and other important issues that will
affect the
ability of Texas to transition to a healthy, competitive
insurance marketplace.
For the latest information about the insurance
market, please visit our Web site at www.tcais.org.
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