Houston Chronicle, Nov. 17, 2003

The Chronicle's Nov. 11 article, "Poor credit can still raise insurance rates -- for now," claiming that insurers' use of credit [data] unfairly discriminates against any group [on its members' insurance ratings] is absolutely false. In fact, credit information is one of the most fair and objective underwriting tools available, and insurers use it without regard to a person's income, race or ethnicity.

In 1999, the Virginia Bureau of Insurance released a study that concluded that credit is an accurate predictor to assess insurance risks and that the use of credit information does not discriminate. Insurers use credit information because it helps them make more accurate underwriting decisions.

Applicants and policyholders who are financially responsible can enjoy lower premiums, while those who are less financially responsible pay a premium that better reflects the risk they represent. The ability of insurers to make sound underwriting decisions also helps keep the insurance marketplace competitive. Let's stick with the facts when it comes to insurers' use of credit.

Beaman Floyd, director,
Texas Coalition For Affordable
Insurance Solutions, Austin