Oregon Advises P/C Industry of Credit Scoring Changes

posted May 12, 2010, 2:06 PM by Credit Detailer

The Oregon Department of Consumer and Business Services Insurance Division is reminding the insurance industry of new credit scoring legislation, which passed in the 2009 Legislative session and apply to personal insurance policies issued or renewed on or after Jan. 1, 2010

Questions have been raised regarding the interpretation of certain provisions in sections (2)(a) and (2)(b) of Senate Bill 377, DCBS said. Thus, it has provided a list of frequently asked questions and answers on its Web site.

Senate Bill 260, which passed in the 2003 Legislative Session, imposed limits on an insurer's use of credit history or insurance scoring for certain types of personal insurance. It allowed insurers to use a consumer's credit information only when issuing new personal insurance policies. If an insurer assigned a consumer to a less favorable rating category for a personal insurance policy based on the use of the consumer's credit information, that consumer could request a rerating of that policy no more than once annually. Senate Bill 377 (SB 377), which passed in the 2009 Legislative Session, expanded the rights of a consumer to request rerating of a personal insurance policy and provided additional consumer protections. In particular, the results of a rerating can only be used by an insurer to reduce a consumer's premiums.

According to DCBS, if an insurer uses the consumer's credit history or insurance score at any time in the rating of a personal insurance policy, the consumer may request, no more than once per insurer per policy line annually, that the insurer rerate the consumer according to the standards that the insurer would apply if the consumer were initially applying for the same insurance policy.

The insurer shall rerate the consumer within 30 days after receiving a request from the consumer, DCBS. After rerating the consumer based upon the request, the insurer may not use credit information from rerating to increase the premium on any personal insurance policy the consumer holds. If the consumer qualifies for a more favorable rating category, the insurer shall reduce the premiums on all the personal insurance policies the consumer holds in the related policy line for which the consumer's credit history and insurance score would entitle the consumer to lower premiums if the consumer were applying for a new policy. The effective date of any rate change is the date of the consumer's request.

For more information, visithttp://www.insurance.oregon.gov/bulletins/bulletin2010-02.html.

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