As we previously reported here, the Florida Office of Insurance Regulation recently held a hearing on the use of credit information in insurance ratemaking by insurers. Recently, Florida’s Chief Financial Officer Alex Sink joined with Sean Shaw, Florida’s Insurance Consumer Advocate, in calling for an end to the use of credit scoring when determining the cost and availability of personal automobile insurance.
CFO Sink’s reasoning is that in such challenging times, the increasing of insurance rates based on a reduction in credit score would be “kicking Floridians when they are down,” especially when there is no change in their driving record. Further, CFO Sink stated that she was unimpressed by explanations from automobile insurance companies about why they need to use consumer credit scores.
To see the full transcript of last month’s hearing, which includes questions Mr. Shaw asked of insurance industry representatives, click here.