Insurance Credit Scoring. The effect of Credit Scoring on Pricing

Size: px
Start display at page:

Download "Insurance Credit Scoring. The effect of Credit Scoring on Pricing"

Transcription

1 Insurance Credit Scoring The effect of Credit Scoring on Pricing Abstract The primary objective of every insurance company is to compare rates for insurance policies as closely as possible with the actual cost of claims. This constant search for accuracy is mutually beneficial for consumers as well as insurance companies. New developments have led to the pricing of insurers using Insurance Scoring, which facilitate insurers to better assess the risk of future claims. An insurance score is an arithmetical level based on a person s credit history. Insurance scores are a second-hand way to help insurance providers categorize between lower and higher insurance risks and thus charge a premium equal to the risk they are assuming. Previous statistics show people who have a poor insurance score are more likely to file a claim. On the other hand individuals that have good insurance scores are least likely to file a claim. Insurance scores do not include data on race or income because insurers do not collect this information from applicants for insurance. Thus, our empirical research will show that even with the positive effects of credit scoring, it still has a negative effect that needs to be mitigated under the state regulation. Hamad Almashary Abdulgaffar Erbek Willie Reddic 1

2 Introduction Insurance scores are confidential rankings based on credit history information. Insurance scores are used to provide insurers with a snapshot to provide service to consumers. The score is derived from the consumer s previous credit history. This data allows the insurers to price insurance premiums/rates more accurately. The data shows that individuals with low insurance scores tend to file more claims. The persons that benefit from Insurance Scoring usually know how to manage their debt well and therefore have good credit scores 1. Positive effects on Insurance Scoring Insurance companies have been using credit scoring with other rating factors as a way to price their clients. In fact, there are many benefits from credit scoring. Credit scoring enables insurers to better assess the risk of future claims 2. In fact, insurance credit scoring helps insurers to differentiate between higher and lower insurance risk. Thus, insurers will charge a premium that is based on the information provided by the credit score. Statistically, people who have a good insurance score are least likely to file a claim. A recent study by the Texas Department of Insurance related to automobile insurance confirmed that Insurance Scoring based on credit information is correlated with risk. In fact, the study shows that the average loss per vehicle for people with the worst credit scores is double that of people with the best credit scores 3 (as shown below). 1 Insurance Information Institute, Inc., Credit Scoring, February Claire Wilkinson, The Use of Credit Information in Personal Lines Insurance Underwriting, June Texas Department of Insurance, Overview of the Texas Credit Study: Texas study confirms that credit scoring accurately assesses the risk of future claims, December 30,004 2

3 Furthermore, the study shows that drivers with the best credit record are involved in about 40 percent fewer accidents than those with the worst credit record (as seen below). On the other hand, the same result applied to homeowners insurance. In fact, the same study shows that homeowners insurance loss ratios for people with the worst credit scores are triple those of people with the best scores 4 (as seen below) 4 Texas Department of Insurance, Overview of the Texas Credit Study: Texas study confirms that credit scoring accurately assesses the risk of future claims, December 30,004 3

4 Insurance scores also enable auto insurers to price more accurately, so that people less likely to file a claim pay less for their insurance than people who are more likely to file a claim. In fact, a June 2003 study by EPIC Actuaries conducted for the insurance industry also found that overall, insurance scores significantly increase the accuracy of the risk assessment process. For example, for property damage liability coverage, those with the worst insurance scores had expected losses of 33 percent above average. Those with the best had losses 19 percent below average. Furthermore, most people benefit from Insurance Scoring because the majority of people manage their debt well, which is reflected on their credit score. In addition, creditrelated activities within the last 12 months are given the most weight. Thus, people will reduce their insurance by improving their credit information. Another advantage of credit scoring is that credit records are generally more accurate relative to motor vehicle records (MVRs). In fact, much of that data is missing from motor vehicle records. A 2002 Insurance Research Council study found that MVRs are typically inaccurate. One in five convictions may be missing. Another study found that only 40 percent of reportable accidents appeared on MVRs. Therefore, the credit scoring may be a more appropriate measure for the insurance risk than MVRs. 4

5 Finally, there are some theories that may support credit scoring as a measure for insurance risk. The first theory assumes a positive relationship between financial stress and accidents. According to Clarence Smith of Conning's insurance-research division, Someone having financial problems could be under more stress, which could lead to more accidents. Others theorize that someone who handles personal finances well is likely to be conscientious about other aspects of life, including driving and car maintenance. Negative Effects of Insurance Scoring The use of credit scoring in the insurance industry is considered a positive improvement by a vast majority of the community. However, there are also some critics about the use and the effect of credit scoring on some groups. In this part of our study we highlight views pertaining to this consideration. According to a survey done by S. Ramdas and N. Kaithwal, 5 Insurance Scoring is defined as follows: Insurance Scoring can be defined as the use of certain aspects of a consumer s credit history in combination with relevant behavioral and descriptive parameters, to help determine whom to insure and at what price. This definition of scoring combines many other pieces of relevant information. Nevertheless, this does not decrease the great effect of credit scoring in the overall scoring process. Insurance scoring has been criticized mainly for reasons of unfairness, lack of transparency, and discrimination. 5 Insurance Scoring About Time!, Using Credit History to Manage Insurance Risk,Ramdas, Shrikkant and Kaithwal,Nikhil, August

6 Unfair usage is the biggest criticism area, with arguments along several points including: concerns about inaccuracies in credit history, lack of clarity regarding consumers who don t have a reasonably long credit history, perceived harshness against bankruptcy filers, and that most filings are due to major and often sudden medical or economic catastrophes to the consumer s family such as job loss, disease, divorce, etc. Another criticism is the effect of Insurance Scoring on the increasing cost of insurance. According to this assumption, the redistribution of premiums collected is seen as a significant increase in rates for some groups. An increase in the cost of administering the scoring process is likely to be passed on to the consumer. Lack of transparency is another problem with the scoring process. The issue itself is a difficult concept to explain to agents and it is resulting in reduced sales and consequently their commissions. Due to variations in the application of scoring across different states, there seems to be a lack of clarity on how credit variables are used to determine the score. Another aspect of this problem is about the transparency of the overall process. Scoring model vendors refuse to divulge the methodology of these studies, the underlying data for independent verification, or the details of the study results. They claim these models are a "trade secret" and 'fear' that disclosure would lead to outside infringement. 6 Discrimination is a potential problem for some groups. It possibly penalizes minorities and socially disadvantaged groups, such as those from lower income groups. It 6 Insurance Scoring About Time!, Using Credit History to Manage Insurance Risk,Ramdas, Shrikkant and Kaithwal,Nikhil, August

7 could be viewed as another method to redline on the basis of geographical areas against certain minority groups. 7 Some problems in pricing premiums may arise as a result of Insurance Scoring the ability of the insurance companies to raise or lower the insurance credit score they will accept at will! The use of credit scoring models allows for insurance companies the ability to raise rates without ever applying to the department of insurance for a rate increase. Rates are regulated, underwriting is not. Companies can adjust the underwriting models by changing the cutoff points for the credit tiers. So, if they want to write more business, they lower the score the will accept; less business, they raise the score. As insurance credit scores are also run on existing customers, they are at the mercy of the insurance companies and are exposed to rate increases, moves to subsidiaries and losing their insurance altogether. 8 There is also a problem with the accuracy of the model. Without evidence of reckless driving, (speeding tickets, etc.) and prior losses, there is no proof that any insurance consumer will have an accident and file a claim or will be hit by a hail storm. The insurance company does not have a crystal ball. 9 The critiques about the very existence and the philosophy behind the insurance companies are also valuable. "Insurers no longer want to take risks on uncertain things like weather losses or major lawsuits, but instead want to finance cars and homes. The way to get good loans is by pre-qualifying auto and homeowners policyholders. If a 7 The Truth behind, Insurance Credit Scoring, June The Truth behind, Insurance Credit Scoring, June The Truth behind, Insurance Credit Scoring, June

8 customer doesn t have excellent credit, regardless of a clean insurance record, the carrier quotes higher rates because it will presumably be unable to finance the client s car or sell him/her a mutual fund. All the major insurance companies have their own banking sources, many of which have been established in the last two years." 10 The use of the credit scoring information is another point of criticism. "Consumer advocates also decry the use of CBUP (credit based underwriting and pricing) because the practice forces consumers to divulge private and sensitive information that may not serve to measure risk in order to apply for insurance. Credit information is highly marketable, falls under the relatively lax financial privacy protection provisions of the Gramm-Leach-Bliley Act. Leading consumer advocates point out those insurers may collect credit information for resale, or cross-marketing value alone." 11 According to some arguments, the magnitude and the depth of information on the hands of insurance companies is vast because of the existence of Auto Insurance. It is a legally required insurance by law in most states. Due to this and the practice of insurance credit scoring, the insurance industry has one of the most complete files on any individual. This information includes: name, address, beneficiaries, social security number, family member information, assets, income, property locations and values, transactions with insurer, account balances, policy coverage, payment history, the premium, claims information, method of purchases, reports from consumer reporting agencies, motor vehicle and driver data, loss history reports, additional driver data, and in some cases, medical and employment information. 10 Insurance Journal Online, Credit Based Underwriting and Pricing, February Insurance Journal Online, Credit Based Underwriting and Pricing, February

9 In addition, there are some qualms about the real link between scoring and loss probability. Insurance credit scoring has been used for close to six years now and still they have not proved the link between credit history and driving skill or ability. Scholars in such fields as psychology, safety engineering, occupational medicine, consumer research, and risk perception have been studying this link and have yet to offer a plausible explanation. 12 There are some doubts about the efficiency of legislation, such as the lack of addressing some specific issues. When there is an error in your credit report and it is corrected, insurance companies are not obligated by state or federal law to reverse any adverse action against you. 13 Consequently, the negative effect of credit scoring in the insurance industry is an issue that needs some consideration/possible solutions. There may be a need for some amendments in federal and states legislation. Insurance companies might seek to bring clarity to the transparency of the process. The use of personal information also may need some additional attention in order to determine what information should be used to determine insurance worthiness. Finally, precautions might be taken in order to assure those some groups do not feel they are being discriminated against or redlined. On a positive note, insurance scoring may also create competition in pricing among companies. Insurance companies may use different scoring models so that they create different price levels in premiums. As a result, consumers may have more choices to determine what s best for them. Scoring also may create new products and new markets which could result in more customized products being to consumers. Custom 12 The Truth behind, Insurance Credit Scoring, June The Rough Notes Company, Inc, Personal Insurance Worthines, March

10 scores may help an insurer better differentiate itself from the competition in terms of cost, product and market segmentation which may have an overall effect in increasing business volumes. Those possible improvements may create positive or negative results for insurance customers. It is predictable to say that those improvements will create positive results for groups who have a good credit score but it is not that easy to make the same prediction for less advantageous groups. Lower income Americans are more likely to have less disposable income and resources to cover an incident themselves and may/will need compensation from the insurance industry. Thus, there will probably be more claims filed by lower income Americans making them more likely to be penalized by the insurance companies. 10

11 In conclusion, this paper showed that credit scoring has some positive and negative effects. One of the positive effects is to help insurers to better assess the risk of future claims. Also, our empirical study shows that people who have a poor insurance score are more likely to file a claim. However, Insurance Scoring also negative effects which include unfairness, lack of transparency, and discrimination. In light of these effects, more than 40 states in the US have passed laws that have restricted the use of credit scoring in order to mitigate these negative effects. For example, Illinois allows credit scores to be used, but not as the sole factor in insurance decisions. 11

Statement of the Fair, Isaac and Company Inc. To the Office of Financial and Insurance Services. 2002 Public Hearings

Statement of the Fair, Isaac and Company Inc. To the Office of Financial and Insurance Services. 2002 Public Hearings Statement of the Fair, Isaac and Company Inc. To the Office of Financial and Insurance Services 2002 Public Hearings Fair, Isaac is a global provider of custom analytics and decision technology. Widely

More information

FICO Credit-Based Insurance Scores

FICO Credit-Based Insurance Scores 1. Most consumers benefit from the use of insurance scores Lower premiums In its July 2007 report, Credit-Based Insurance Scores: Impacts on Consumers of Automobile Insurance, the Federal Trade Commission

More information

My name is Steven Lehmann. I am a Principal with Pinnacle Actuarial Resources, Inc., an actuarial consulting

My name is Steven Lehmann. I am a Principal with Pinnacle Actuarial Resources, Inc., an actuarial consulting Insurer Use of Education and Occupation Data National Conference of Insurance Legislators Special Property-Casualty Insurance Meeting February 28, 2009 My name is Steven Lehmann. I am a Principal with

More information

The Insurance Score. Answers to frequently asked questions about credit-based scoring in personal lines underwriting

The Insurance Score. Answers to frequently asked questions about credit-based scoring in personal lines underwriting The Insurance Score nswers to frequently asked questions about credit-based scoring in personal lines underwriting 2001 Introduction s our society changes over time, the underwriting of personal insurance

More information

TITLE 18 INSURANCE DELAWARE ADMINISTRATIVE CODE 1. 900 Consumer Rights. 906 Use of Credit Information [Formerly Regulation 87]

TITLE 18 INSURANCE DELAWARE ADMINISTRATIVE CODE 1. 900 Consumer Rights. 906 Use of Credit Information [Formerly Regulation 87] TITLE 18 INSURANCE DELAWARE ADMINISTRATIVE CODE 1 900 Consumer Rights 906 Use of Credit Information [Formerly Regulation 87] 1.0 Authority This regulation is adopted by the Commissioner pursuant to the

More information

WHITE PAPER Insurance Rates and Your Credit: What Every Consumer Should Know. October 21, 2013 1

WHITE PAPER Insurance Rates and Your Credit: What Every Consumer Should Know. October 21, 2013 1 WHITE PAPER Insurance Rates and Your Credit: What Every Consumer Should Know October 21, 2013 1 1. What is a Credit-Based Insurance Score 2. Why do insurers use a Credit-Based Insurance Score? 3. What

More information

Who? Georgia-based. Not... What? Publicly Traded Formerly part of Equifax. Credit Bureau Insurance Company

Who? Georgia-based. Not... What? Publicly Traded Formerly part of Equifax. Credit Bureau Insurance Company Who? Georgia-based Publicly Traded Formerly part of Equifax Not... Credit Bureau Insurance Company What? Customers - Products - insurance companies in personal lines property & casualty underwriting information

More information

The Conference on Computers, Freedom, and Privacy. 'Overseeing' the Poor: Technology Privacy Invasions of Vulnerable Groups

The Conference on Computers, Freedom, and Privacy. 'Overseeing' the Poor: Technology Privacy Invasions of Vulnerable Groups 'Overseeing' the Poor: Technology Privacy Invasions of Vulnerable Groups Birny Birnbaum Center for Economic Justice www.cej-online.org Credit Scoring: 21 st Century Redlining and the End of Insurance Why

More information

Understanding the Use of Credit and Scores for Insurance Underwriting

Understanding the Use of Credit and Scores for Insurance Underwriting Understanding the Use of Credit and Scores for Insurance Underwriting 1. Why do insurers use credit? Insurance companies use financial history along with other factors (such as years of driving experience

More information

Report to the 79 th Legislature. Use of Credit Information by Insurers in Texas

Report to the 79 th Legislature. Use of Credit Information by Insurers in Texas Report to the 79 th Legislature Use of Credit Information by Insurers in Texas Texas Department of Insurance December 30, 2004 TABLE OF CONTENTS Executive Summary Page 3 Discussion Introduction Page 6

More information

what every insurance agent needs to know about credit-based insurance scores

what every insurance agent needs to know about credit-based insurance scores what every insurance agent needs to know about credit-based insurance scores What every insurance agent needs to know about credit-based insurance scores... Insurance agents have the complex job of being

More information

THE USE OF CREDIT HISTORY FOR PERSONAL LINES OF INSURANCE: REPORT TO THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS

THE USE OF CREDIT HISTORY FOR PERSONAL LINES OF INSURANCE: REPORT TO THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS THE USE OF CREDIT HISTORY FOR PERSONAL LINES OF INSURANCE: REPORT TO THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS American Academy of Actuaries Property/Casualty Products, Pricing, and Market Committee

More information

A. Introduction. B. Legislation and Regulations

A. Introduction. B. Legislation and Regulations Underwriting Rules A. Introduction All insurers that are licensed to write automobile insurance in Ontario are required to make a filing in respect of their underwriting rules with the (FSCO). The Filing

More information

This brochure is intended to help in answering questions and communicating the numerous benefits of insurance scoring to insurance customers.

This brochure is intended to help in answering questions and communicating the numerous benefits of insurance scoring to insurance customers. This pamphlet has been designed to help those involved with the insurance industry better understand the issue of insurance scoring. However, because of the important role agents play in dealing with policyholders

More information

Automobile Insurance in Pennsylvania a supplement to the Automobile Insurance Guide

Automobile Insurance in Pennsylvania a supplement to the Automobile Insurance Guide and answers about Automobile Insurance in Pennsylvania a supplement to the Automobile Insurance Guide My automobile policy was canceled because I did not pay my premium on time. Is this legal? Yes. If

More information

Insurance Credit Scoring in Alaska

Insurance Credit Scoring in Alaska Insurance Credit Scoring in Alaska FEBRUARY 21, 2003 FRANK H. MURKOWSKI GOVERNOR Edgar Blatchford Commissioner Stan Ridgeway Acting Director STATE OF ALASKA DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT

More information

TEXAS AUTO SUPPLEMENT

TEXAS AUTO SUPPLEMENT AGENCY TEXAS AUTO SUPPLEMENT APPLICANT/NAMED INSURED COMPANY: EFFECTIVE DATE CODE: SUB CODE: POLICY #: CONSUMER BILL OF RIGHTS PERSONAL AUTOMOBILE INSURANCE AVISO: Este documento es un resumen de sus derechos

More information

Your Guide to Auto Insurance Premiums

Your Guide to Auto Insurance Premiums INSURANCE FACTS for Pennsylvania Consumers Your Guide to Auto Insurance Premiums 1-877-881-6388 Toll-free Automated Consumer Line www.insurance.state.pa.us Pennsylvnaia Insurance Department Website Required

More information

The Use of Credit Scores by Auto Insurers: Adverse Impacts on Low- and Moderate-Income Drivers

The Use of Credit Scores by Auto Insurers: Adverse Impacts on Low- and Moderate-Income Drivers The Use of Credit Scores by Auto Insurers: Adverse Impacts on Low- and Moderate-Income Drivers December 2013 Stephen Brobeck Executive Director J. Robert Hunter Director of Insurance Tom Feltner Director

More information

HOW CREDIT SCORING UNFAIRLY RAISES RATES

HOW CREDIT SCORING UNFAIRLY RAISES RATES INSURANCE CREDIT SCORING Think your credit score only determines whether you can get a loan or a mortgage? Think again. Inside This Guide: Is Your Home or Auto Insurer Using Credit Scoring?........ View

More information

BEFORE THE INSURANCE COMMISSIONER OF THE STATE OF CALIFORNIA

BEFORE THE INSURANCE COMMISSIONER OF THE STATE OF CALIFORNIA CALIFORNIA DEPARTMENT OF INSURANCE LEGAL DIVISION Rate Enforcement Bureau Nikki S. McKennedy, Bar No. Fremont Street st Floor San Francisco CA Telephone: -- Facsimile: -0-0 Email: Nikki.McKennedy@insurance.ca.gov

More information

MODEL ACT REGARDING USE OF CREDIT INFORMATION IN PERSONAL INSURANCE

MODEL ACT REGARDING USE OF CREDIT INFORMATION IN PERSONAL INSURANCE MODEL ACT REGARDING USE OF CREDIT INFORMATION IN PERSONAL INSURANCE Adopted by the Property-Casualty Insurance and Executive Committees on November 22, 2002. Readopted by the Property-Casualty Insurance

More information

Property and Casualty Review Standards Checklist

Property and Casualty Review Standards Checklist Property and Casualty Review Standards Checklist General Filing Requirements apply to all property and casualty lines of insurance. Once you have reviewed the general filing requirements, please page to

More information

MARYLAND LAWS AND REGULATIONS ON INSURANCE PREMIUM

MARYLAND LAWS AND REGULATIONS ON INSURANCE PREMIUM MARYLAND LAWS AND REGULATIONS ON INSURANCE PREMIUM LAWS: 27-601. (a) In this subtitle the following words have the meanings indicated. (b) (1) Commercial insurance means property insurance or casualty

More information

Insurers Use of Credit Scoring for Homeowners Insurance In Ohio A Report to the Ohio Civil Rights Commission

Insurers Use of Credit Scoring for Homeowners Insurance In Ohio A Report to the Ohio Civil Rights Commission Insurers Use of Credit Scoring for Homeowners Insurance In Ohio A Report to the Ohio Civil Rights Commission From Birny Birnbaum, Consulting Economist January 2003 1. EXECUTIVE SUMMARY Insurance companies

More information

Issues Paper USE OF CREDIT SCORES BY INSURERS. Credit Scoring Working Group June 2011. This document reflects the work of regulators who are

Issues Paper USE OF CREDIT SCORES BY INSURERS. Credit Scoring Working Group June 2011. This document reflects the work of regulators who are Issues Paper USE OF CREDIT SCORES BY INSURERS Credit Scoring Working Group June 2011 This document reflects the work of regulators who are members of CCIR. The April views expressed 2011 should not be

More information

NAIC Consumer Shopping Tool for Auto Insurance

NAIC Consumer Shopping Tool for Auto Insurance NAIC Consumer Shopping Tool for Auto Insurance Need Auto Insurance? Here is What You Need to Know. Whether you are buying auto insurance for the first time, or shopping to be sure you are getting the best

More information

FIS-PUB 0077 (6/13) Number of copies printed: 10,000 / Legal authorization to print: PA 145 of 1979 / Printed on recycled paper

FIS-PUB 0077 (6/13) Number of copies printed: 10,000 / Legal authorization to print: PA 145 of 1979 / Printed on recycled paper DIFS is an equal opportunity employer/program. Auxiliary aids, services and other reasonable accommodations are available upon request to individuals with disabilities. FIS-PUB 0077 (6/13) Number of copies

More information

No, the MAIP is the way you are assigned to one of the existing automobile insurers if you have been unable to find coverage on your own.

No, the MAIP is the way you are assigned to one of the existing automobile insurers if you have been unable to find coverage on your own. MAIP Consumer Guide from Mass.Gov The Massachusetts Automobile Insurance Plan (MAIP) is an insurance plan for drivers who cannot obtain insurance in the voluntary market. If you cannot find an insurance

More information

TEXAS HOMEOWNERS AND PERSONAL PROPERTY SUPPLEMENT

TEXAS HOMEOWNERS AND PERSONAL PROPERTY SUPPLEMENT AGENCY TEXAS HOMEOWNERS AND PERSONAL PROPERTY SUPPLEMENT APPLICANT/NAMED INSURED COMPANY: EFFECTIVE DATE CODE: SUB CODE: POLICY #: CONSUMER BILL OF RIGHTS HOMEOWNERS, DWELLING AND RENTERS INSURANCE AVISO:

More information

62nd Legislature AN ACT ALLOWING SPECIAL RISK CLASSIFICATIONS FOR PRIVATE PASSENGER AND COMMERCIAL

62nd Legislature AN ACT ALLOWING SPECIAL RISK CLASSIFICATIONS FOR PRIVATE PASSENGER AND COMMERCIAL 62nd Legislature SB0352 AN ACT ALLOWING SPECIAL RISK CLASSIFICATIONS FOR PRIVATE PASSENGER AND COMMERCIAL AUTOMOBILE POLICIES TO BE BASED ON FAVORABLE AND ADVERSE INFORMATION CONTAINED IN AN EXPERIENCE

More information

Chapter 11 Auto Insurance in the United States (continued)

Chapter 11 Auto Insurance in the United States (continued) Chapter 11 Auto Insurance in the United States (continued) Overview Compensating innocent motorists who have been injured in auto accidents is an important issue for society. Private insurers are not anxious

More information

Credit Scoring in New York A Presentation by the Independent Insurance Agents & Brokers of New York

Credit Scoring in New York A Presentation by the Independent Insurance Agents & Brokers of New York Credit Scoring in New York A Presentation by the Independent Insurance Agents & Brokers of New York Background Why Do Insurers Check Credit Scores? Insurers say that credit history helps them to assess

More information

June 7, 2011. Plan Participants of the Priest Personal Automobile Insurance Policy Year: July 1, 2011 July 1, 2012. Included in this packet are:

June 7, 2011. Plan Participants of the Priest Personal Automobile Insurance Policy Year: July 1, 2011 July 1, 2012. Included in this packet are: Print date: July 1, 2011 June 7, 2011 Re: Plan Participants of the Priest Personal Automobile Insurance Policy Year: July 1, 2011 July 1, 2012 Included in this packet are: Dear Father, A new vehicle insurance

More information

S-4504.1 SUBSTITUTE SENATE BILL 6252. State of Washington 61st Legislature 2010 Regular Session

S-4504.1 SUBSTITUTE SENATE BILL 6252. State of Washington 61st Legislature 2010 Regular Session S-4504.1 SUBSTITUTE SENATE BILL 6252 State of Washington 61st Legislature 2010 Regular Session By Senate Labor, Commerce & Consumer Protection (originally sponsored by Senators Kohl-Welles, Kline, and

More information

THE CANADIAN MERIT RATING PLAN FOR INDIVIDUAL AUTOMOBILE RISKS

THE CANADIAN MERIT RATING PLAN FOR INDIVIDUAL AUTOMOBILE RISKS 214 CANADIAN MERIT RATING PLAN FOR INDIVIDUAL AUTOMOBILE RISKS THE CANADIAN MERIT RATING PLAN FOR INDIVIDUAL AUTOMOBILE RISKS BY HERBERT E. WITTICK The practise of merit rating individual automobile risks

More information

Written Submission to the Canadian Council of Insurance Regulators Credit Scoring Working Group

Written Submission to the Canadian Council of Insurance Regulators Credit Scoring Working Group Written Submission to the Canadian Council of Insurance Regulators Credit Scoring Working Group Monday, August 8, 2011 The Co-operators is pleased to provide comments to CCIR s issues paper Use of Credit

More information

Consumer Legal Guide. Your Guide to Automobile Insurance and Accidents

Consumer Legal Guide. Your Guide to Automobile Insurance and Accidents Consumer Legal Guide Your Guide to Automobile Insurance and Accidents WHAT TYPES OF COVERAGES ARE AVAILABLE? Generally, automobile insurance policies provide Bodily Injury and Property Damage Liability

More information

CONSUMER BILL OF RIGHTS Personal Automobile Insurance

CONSUMER BILL OF RIGHTS Personal Automobile Insurance Figure 1: 28 TAC 5.9970(b) CONSUMER BILL OF RIGHTS Personal Automobile Insurance AVISO: Este documento es un resumen de sus derechos como asegurado. Usted tiene el derecho a llamar a su compañía y pedir

More information

Statement of the. Regarding the Use of Credit Information by Personal Lines Insurers

Statement of the. Regarding the Use of Credit Information by Personal Lines Insurers National Association of Independent Insurers 2600 River Road, Des Plaines, IL 60018-3286 Statement of the National Association of Independent Insurers Regarding the Use of Credit Information by Personal

More information

Chapter 10. Chapter 10 Learning Objectives. Insurance and Risk Management: An Introduction. Property and Motor Vehicle Insurance

Chapter 10. Chapter 10 Learning Objectives. Insurance and Risk Management: An Introduction. Property and Motor Vehicle Insurance Chapter 10 Property and Motor Vehicle Insurance McGraw-Hill/Irwin Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved. 10-1 Chapter 10 Learning Objectives 1. Develop a risk management

More information

No Evidence of Disparate Impact in Texas Due to Use of Credit Information by Personal Lines Insurers

No Evidence of Disparate Impact in Texas Due to Use of Credit Information by Personal Lines Insurers No Evidence of Disparate Impact in Texas Due to Use of Credit Information by Personal Lines Insurers January 2005 Robert P. Hartwig, Ph.D., CPCU, Senior Vice President & Chief Economist Insurance Information

More information

INSURANCE BASICS (DON T RISK IT)

INSURANCE BASICS (DON T RISK IT) INSURANCE BASICS (DON T RISK IT) WHAT IS INSURANCE? Risk management tool that limits financial loss due to illness, injury or damage in exchange for a premium Shared Risk- Insurance company collects premiums

More information

CHAPTER 28 Insurance

CHAPTER 28 Insurance CHAPTER 28 Insurance Chapter Objectives After studying this chapter, you will be able to describe types of automobile insurance coverage. explain the importance of health insurance as a fringe benefit

More information

Glossary of Insurance Terms

Glossary of Insurance Terms From the Insurance Bureau of Canada (IBC) Accident: An event that happens by chance and is not expected in the normal course of events, which results in harm to people, damage to property or equipment,

More information

Prepared by The Office of the Commissioner of Insurance

Prepared by The Office of the Commissioner of Insurance State of Wisconsin / OFFICE OF THE COMMISSIONER OF INSURANCE Scott McCallum, Governor Connie L. O Connell, Commissioner Wisconsin.gov 121 East Wilson Street P.O. Box 7873 Madison, Wisconsin 53707-7873

More information

CHAPTER 18 GENERAL INSURANCE

CHAPTER 18 GENERAL INSURANCE WISCONSIN LEGISLATOR BRIEFING BOOK 2015-16 CHAPTER 18 GENERAL INSURANCE Insurance protects against unexpected losses of income or property. The state regulates general insurance matters through the Office

More information

Submitted by Lorilee A Medders, PhD November 4, 2011

Submitted by Lorilee A Medders, PhD November 4, 2011 Personal Injury Protection (PIP) in the State of Florida Evaluation of Data Collected by the Florida Office of Insurance Regulation (OIR) In Response to April 2011 PIP Data Call Submitted by Lorilee A

More information

Economic Education for Consumers Chapter 14 Study Guide Automobile and Home Insurance: Sharing the Risk

Economic Education for Consumers Chapter 14 Study Guide Automobile and Home Insurance: Sharing the Risk Economic Education for Consumers Chapter 14 Study Guide Automobile and Home Insurance: Sharing the Risk Section 14-1 Insurance Basics Define Risk Management. Define Shared Risk. How do insurance companies

More information

INSURANCE REGULATION 25 AUTOMOBILE INSURANCE RATING. Additive Amounts for Policy Assessments Reductive Amounts for Policy Credits

INSURANCE REGULATION 25 AUTOMOBILE INSURANCE RATING. Additive Amounts for Policy Assessments Reductive Amounts for Policy Credits Table of Contents State of Rhode Island and Providence Plantations DEPARTMENT OF BUSINESS REGULATION Division of Insurance 1511 Pontiac Avenue, Bldg. 69-2 Cranston, RI 02920 INSURANCE REGULATION 25 AUTOMOBILE

More information

Texas Municipal Courts Education Center

Texas Municipal Courts Education Center TexasSure Bringing Insurance Verification Into the 21 st Century Texas Municipal Courts Education Center 2008-2009 Academic Year Session Learning Objectives: By the end of the session, participants should

More information

Definitions: Insurance premium compensate insurance policy insurance broker

Definitions: Insurance premium compensate insurance policy insurance broker 1) Definitions: Insurance is an arrangement in which an insurance company compensates a person or a company for a specified loss caused by e.g. an accident, fire, injury, illness or death in return for

More information

a consumers guide to No-Fault Automobile Insurance in Michigan

a consumers guide to No-Fault Automobile Insurance in Michigan a consumers guide to No-Fault Automobile Insurance in Michigan No-Fault Automobile Insurance in Michigan The Michigan no-fault system was adopted in 1973 to increase the level of benefits paid to injured

More information

NEW YORKERS FOR RESPONSIBLE LENDING

NEW YORKERS FOR RESPONSIBLE LENDING NEW YORKERS FOR RESPONSIBLE LENDING August 31, 2015 Federal Insurance Office Attn: Lindy Gustafson, Room 1319 MT Department of the Treasury 1500 Pennsylvania Avenue NW Washington, DC 20220 RE: Monitoring

More information

Understanding How Insurers Use Credit Information

Understanding How Insurers Use Credit Information Understanding How Insurers Use Credit Information UNDERSTANDING HOW INSURERS USE CREDIT INFORMATION Many personal auto and homeowners insurance companies look at several factors, including consumer credit

More information

Credit Scoring and Its Role In Lending A Guide for the Mortgage Professional

Credit Scoring and Its Role In Lending A Guide for the Mortgage Professional Credit Scoring and Its Role In Lending A Guide for the Mortgage Professional How To Improve an Applicant's Credit Score There is no magic to improving an applicant's credit score. Credit scores automatically

More information

RE: Disclosure Requirements for Short Duration Insurance Contracts

RE: Disclosure Requirements for Short Duration Insurance Contracts INS-14 November 21, 2014 Mr. Russell G. Golden Chairman Financial Accounting Standards Board 401 Merritt 7 P.O. Box 5116 Norwalk, Connecticut 06856-5116 RE: Disclosure Requirements for Short Duration Insurance

More information

The Ten privacy principles and our commitment to them are as follows:

The Ten privacy principles and our commitment to them are as follows: Your Privacy is Our Concern Federated Insurance Company of Canada 1 is committed to protecting your personal information, whether you are a customer of Federated or not, and, no matter how we came to be

More information

Age and Insurance: Helping older customers find the cover they need. February 2009

Age and Insurance: Helping older customers find the cover they need. February 2009 Age and Insurance: Helping older customers find the cover they need February 2009 AGE AND INSURANCE: HELPING OLDER CUSTOMERS FIND THE COVER THEY NEED 1 Executive Summary The insurance industry is committed

More information

LA R.S. 22:3051-3065 [Added by Acts 1997, No. 1475, 2, eff. July 15, 1997]

LA R.S. 22:3051-3065 [Added by Acts 1997, No. 1475, 2, eff. July 15, 1997] LA R.S. 22:3051-3065 [Added by Acts 1997, No. 1475, 2, eff. July 15, 1997] LOUISIANA REVISED STATUTES TITLE 22. INSURANCE CHAPTER 6. FINANCIAL INSTITUTION SALES 3051. Short title 3052. Purpose This Chapter

More information

Automobile Insurance Guide

Automobile Insurance Guide Automobile Insurance Guide Page 1 Simply stated, automobile insurance is a contract between you and your insurance company that protects you against financial loss if you are in an accident. Auto policies

More information

EPILEPSY Legal Rights Legal Issues

EPILEPSY Legal Rights Legal Issues EPILEPSY Legal Rights Legal Issues LEGAL RIGHTS LEGAL ISSUES This brochure is not a substitute for legal advice. It is designed for information purposes only. Over the past few decades, great strides have

More information

Does new scoring system mean higher or lower insurance premiums for your home?

Does new scoring system mean higher or lower insurance premiums for your home? 1 of 6 4/16/2012 2:59 PM Agents Join Here RSS Insurance Quotes Auto Insurance Life Insurance Home Insurance Health Insurance Resources Get An Insurance Quote Zip Code: Insurance Type: Share and Enjoy:

More information

Ohio Department of Insurance Regulatory Report

Ohio Department of Insurance Regulatory Report Ohio Department of Insurance Regulatory Report State of Insurer Compliance with the Credit History and Credit Score Rule Issued July 2005 Ann Womer Benjamin, Director Bob Taft, Governor Background In 2003,

More information

Presented to the. Board of Commissioners of Public Utilities MELOCHE MONNEX COMMENTS ON

Presented to the. Board of Commissioners of Public Utilities MELOCHE MONNEX COMMENTS ON MELOCHE MONNEX COMMENTS ON THE REVIEW OF AUTOMOBILE INSURANCE IN NEWFOUNDLAND AND LABRADOR Presented to the Board of Commissioners of Public Utilities February 2005 TABLE OF CONTENT PREAMBLE... 3 INTRODUCTION...

More information

Benefits & Implications of State Workers Compensation Fund Modernization and Privatization

Benefits & Implications of State Workers Compensation Fund Modernization and Privatization www.pwc.com/us/insurance Benefits & Implications of State Workers Compensation Fund Modernization and Privatization State workers compensation funds currently face several challenges related to the overall

More information

Habitat Nassau Application for Super-storm Sandy Home Repairs

Habitat Nassau Application for Super-storm Sandy Home Repairs Habitat Nassau Application for Super-storm Sandy Home Repairs PLEASE READ CAREFULLY BEFORE COMPLETING THE APPLICATION Habitat for Humanity of Nassau County, NY Inc will help low to moderate income homeowners

More information

Glossary of Insurance Terms: (obtained from website: http://www.iii.org/individuals/glossary/alfa.l/)

Glossary of Insurance Terms: (obtained from website: http://www.iii.org/individuals/glossary/alfa.l/) Glossary of Insurance Terms: (obtained from website: http://www.iii.org/individuals/glossary/alfa.l/) ACTUAL CASH VALUE A form of insurance that pays damages equal to the replacement value of damaged property

More information

To: Our Valued Clients From: Agency Name Re: Gap Letter

To: Our Valued Clients From: Agency Name Re: Gap Letter To: Our Valued Clients From: Agency Name Re: Gap Letter From time to time, we mail a notice to our clients (past, current, and potential) called a Gap Letter. The purpose of this letter is to inform you

More information

CPN (Credit Privacy Number) How to Set Up & Use You re Credit Privacy Number

CPN (Credit Privacy Number) How to Set Up & Use You re Credit Privacy Number CPN (Credit Privacy Number) How to Set Up & Use You re Credit Privacy Number Presently, federal law allows the ability for someone to legally use a Credit Privacy Number instead of a Social Security Number.

More information

Home and Auto Insurance Program Just the facts for credit union members

Home and Auto Insurance Program Just the facts for credit union members Home and Auto Insurance Program Just the facts for credit union members CUMIS is a trademark of CUMIS Insurance Society Inc. and is used under licence. Insurance is underwritten by CUMIS General Insurance

More information

Volunteer Driver Application Form

Volunteer Driver Application Form Road to Recovery Volunteer Driver Application Form Please Print Name: Street Address: City State Zip: Other Address Information/ Email: Home Phone: Work Phone: Date of Birth: Occupation: Emergency Contact

More information

The Use of. Insurance Credit Scoring. In Automobile and Homeowners Insurance

The Use of. Insurance Credit Scoring. In Automobile and Homeowners Insurance The Use of Insurance Credit Scoring In Automobile and Homeowners Insurance A Report to the Governor, the Legislature and the People of Michigan Frank M. Fitzgerald, Commissioner Office of Financial and

More information

PREMIUM CHANGES 27 604.

PREMIUM CHANGES 27 604. PREMIUM CHANGES 27 604. (a) (1) This section applies only to policies of personal insurance and insurance issued under the Maryland Property Insurance Availability Act or any similar act instituted to

More information

AN ANALYSIS OF INSURANCE COMPLAINT RATIOS

AN ANALYSIS OF INSURANCE COMPLAINT RATIOS AN ANALYSIS OF INSURANCE COMPLAINT RATIOS Richard L. Morris, College of Business, Winthrop University, Rock Hill, SC 29733, (803) 323-2684, morrisr@winthrop.edu, Glenn L. Wood, College of Business, Winthrop

More information

A CONSUMER'S GUIDE TO INSURANCE COMPANIES' USE OF CREDIT INFORMATION. from YOUR North Carolina Department of Insurance CONSUMER'SGUIDE

A CONSUMER'S GUIDE TO INSURANCE COMPANIES' USE OF CREDIT INFORMATION. from YOUR North Carolina Department of Insurance CONSUMER'SGUIDE A CONSUMER'S GUIDE TO INSURANCE COMPANIES' USE OF CREDIT INFORMATION from YOUR North Carolina Department of Insurance CONSUMER'SGUIDE A MESSAGE FROM YOUR INSURANCE COMMISSIONER Greetings, Auto and Homeowners

More information

State of Rhode Island and Providence Plantations DEPARTMENT OF BUSINESS REGULATION Division of Insurance 233 Richmond Street Providence, RI 02903

State of Rhode Island and Providence Plantations DEPARTMENT OF BUSINESS REGULATION Division of Insurance 233 Richmond Street Providence, RI 02903 Table of Contents State of Rhode Island and Providence Plantations DEPARTMENT OF BUSINESS REGULATION Division of Insurance 233 Richmond Street Providence, RI 02903 INSURANCE REGULATION 25 AUTOMOBILE INSURANCE

More information

Personal and Business Auto Table of Contents p. 1 of 5 Unit 1 - Introducing Auto Insurance pp. 7-41

Personal and Business Auto Table of Contents p. 1 of 5 Unit 1 - Introducing Auto Insurance pp. 7-41 Personal and Business Auto Table of Contents p. 1 of 5 Unit 1 - Introducing Auto Insurance pp. 7-41 Problems associated with auto accidents and insurance The large number of auto incidents High Cost of

More information

A LESSON PLAN TO UNDERSTANDING. Credit Scores. Provided by

A LESSON PLAN TO UNDERSTANDING. Credit Scores. Provided by A LESSON PLAN TO UNDERSTANDING Credit Scores Provided by A LESSON PLAN TO UNDERSTANDING Credit Scores Provided by INTRODUCTION A credit score is a three-digit number derived from a mathematical interpretation

More information

How to File a Protest of an Auto Insurance Cancellation or Surcharge

How to File a Protest of an Auto Insurance Cancellation or Surcharge How to File a Protest of an Auto Insurance Cancellation or Surcharge A protest is a formal objection to a change that your insurance company has made on your personal automobile policy. Protests cannot

More information

A Consumer s Guide to: Auto Insurance. Choosing and using your auto insurance coverage. Washington State Office of the Insurance Commissioner

A Consumer s Guide to: Auto Insurance. Choosing and using your auto insurance coverage. Washington State Office of the Insurance Commissioner A Consumer s Guide to: Auto Insurance Choosing and using your auto insurance coverage Washington State Office of the Insurance Commissioner Washington State www.insurance.wa.gov Office of the Insurance

More information

Maryland Automobile Insurance Fund

Maryland Automobile Insurance Fund Audit Report Maryland Automobile Insurance Fund November 2009 OFFICE OF LEGISLATIVE AUDITS DEPARTMENT OF LEGISLATIVE SERVICES MARYLAND GENERAL ASSEMBLY This report and any related follow-up correspondence

More information

Genome Sequencing. No: insurance companies and employers should not have access to this information:

Genome Sequencing. No: insurance companies and employers should not have access to this information: Genome Sequencing 1. Health Care and the Human Genome: There is an interesting worry in the vicinity of the genetic engineering debate: How will the ever-lowering costs of sequencing DNA affect the health

More information

Effect of Privacy Requirements on Insurance Agents Use of MVRs

Effect of Privacy Requirements on Insurance Agents Use of MVRs Effect of Privacy Requirements on Insurance Agents Use of MVRs Introduction: Insurance agents are ONLY permitted to access MVR reports for UNDERWRITING PURPOSES under the Federal Driver Privacy Protection

More information

Request for Comment #1 How common is the use of stop-loss insurance in connection with self-insured arrangements?

Request for Comment #1 How common is the use of stop-loss insurance in connection with self-insured arrangements? U.S. Department of Labor Office of Health Plan Standards and Compliance Assistance Employee Benefits Security Administration Room N-5653 200 Constitution Avenue, NW Washington, DC 20210 Re: Request for

More information

Web Quoting Guide. Non-Owned Auto policy

Web Quoting Guide. Non-Owned Auto policy 1D2207728 LLLL Web Quoting Guide Quick Reference Manual- Non-Owned auto can be found under Section 6-3, Rule 70 in our 2015 Underwriting Manual. The other non-owned auto sections of the manual which you

More information

General Insurance Definitions:

General Insurance Definitions: General Insurance Definitions: Accidental Death Coverage Accidental death coverage is sometimes a part of your auto insurance policy's Personal Injury Protection (PIP) or may be offered as a separate Accidental

More information

Chapter One: Understanding Your Business Risks...1 Five Strategies for Managing Your Risks...2

Chapter One: Understanding Your Business Risks...1 Five Strategies for Managing Your Risks...2 Contents Introduction Part I: Managing Your Business Risks Chapter One: Understanding Your Business Risks.......................1 Five Strategies for Managing Your Risks..............................2

More information

Teens can't wait to get behind the wheel. But it's a costly milestone young, inexperienced drivers face some of the biggest auto insurance premiums.

Teens can't wait to get behind the wheel. But it's a costly milestone young, inexperienced drivers face some of the biggest auto insurance premiums. Teens can't wait to get behind the wheel. But it's a costly milestone young, inexperienced drivers face some of the biggest auto insurance premiums. -Ann Job, Freelance Writer Section VI Insurance 139

More information

TITLE 114 LEGISLATIVE RULE INSURANCE COMMISSIONER SERIES 37 SUBSTANDARD RISK MOTOR VEHICLE INSURANCE NOTICE REQUIREMENTS

TITLE 114 LEGISLATIVE RULE INSURANCE COMMISSIONER SERIES 37 SUBSTANDARD RISK MOTOR VEHICLE INSURANCE NOTICE REQUIREMENTS TITLE 114 LEGISLATIVE RULE INSURANCE COMMISSIONER SERIES 37 SUBSTANDARD RISK MOTOR VEHICLE INSURANCE NOTICE REQUIREMENTS 114-37-1. General. 1.1. Scope. -- This legislative rule implements the provisions

More information

Anti-Trust Notice. Agenda. Three-Level Pricing Architect. Personal Lines Pricing. Commercial Lines Pricing. Conclusions Q&A

Anti-Trust Notice. Agenda. Three-Level Pricing Architect. Personal Lines Pricing. Commercial Lines Pricing. Conclusions Q&A Achieving Optimal Insurance Pricing through Class Plan Rating and Underwriting Driven Pricing 2011 CAS Spring Annual Meeting Palm Beach, Florida by Beth Sweeney, FCAS, MAAA American Family Insurance Group

More information

The Florist Credit Union:

The Florist Credit Union: The Florist Federal Credit Union BUSINESS LOAN APPLICATION I. GENERAL INFORMATION Applicants Name / Borrower (individual business owner or business name): Tax ID Number: Mailing Address: Contact Person:

More information

Educational Guide to Automobile Insurance

Educational Guide to Automobile Insurance Educational Guide to Automobile Insurance Who needs auto insurance? Suppose you have an auto accident and you hurt or kill someone, damage someone else s property or damage your own car. If you are found

More information

Counterparty Risk Mitigation Strategies for Commodity Merchants

Counterparty Risk Mitigation Strategies for Commodity Merchants Counterparty Risk Mitigation Strategies for Commodity Merchants By Alice Birnbaum As many clients of the BBH Commodities & Logistics group are well aware, recent consolidation among commodity consumers

More information

SPECIAL COMMISSION TO REVIEW THE CURRENT STATE OF THE HOMEOWNERS INSURANCE MARKET IN THE COMMONWEALTH. Dissent

SPECIAL COMMISSION TO REVIEW THE CURRENT STATE OF THE HOMEOWNERS INSURANCE MARKET IN THE COMMONWEALTH. Dissent SPECIAL COMMISSION TO REVIEW THE CURRENT STATE OF THE HOMEOWNERS INSURANCE MARKET IN THE COMMONWEALTH Dissent While we concur with many of the recommendations of the Commission, we believe that while the

More information

Moody Bible Institute Policy and Guidelines for Vehicle Use and Driver Operations

Moody Bible Institute Policy and Guidelines for Vehicle Use and Driver Operations Moody Bible Institute Policy and Guidelines for Vehicle Use and Driver Operations It is the policy of the Moody Bible Institute that its vehicles should be operated safely and in compliance with applicable

More information