San Antonio Express-News
February 23, 2007

Re: "Insurers' use of credit scores should be scrubbed," 2/22/07.

A ban on credit scoring would increase the insurance premiums of up to seventy percent of Texans. Without the use of credit information, low risk customers will be forced to subsidize higher risk customers, contrary to the reverse suggested in yesterday's column.

As Mr. Hendricks noted, credit scores are scientifically related to risk, as confirmed by studies by the Texas Department of Insurance and the University of Texas. Research shows that drivers with the best credit are involved in about 40 percent fewer accidents than those with the lowest credit scores. No studies show how a ban on credit scoring would decrease the number of Texas uninsured motorists.

Texas has some of the nation's most stringent consumer protections regarding insurers' use of credit. Insurance companies who consider credit information must grant exceptions those experiencing extraordinary life events including catastrophic illness or injury, death of a spouse or child, divorce, or job loss, among others.

Any recommendation to ban credit scoring would require lower-risk Texans to pay more for insurance while higher-risk Texans would pay less. That's not a fair result for Texas.

Beaman Floyd
Executive Director
Texas Coalition for Affordable Insurance Solutions, Austin