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PCI Objects to Proposed NAIC Data Call On Credit Issue

Source: PCI

Posted on 30 Sep 2010

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The Property Casualty Insurers Association of America (PCI) strenuously objects to a proposed data call on credit-based insurance scoring that the National Association of Insurance Commissioners (NAIC) Property and Casualty Committee will discuss on Thursday, Sept. 30, in a public hearing in Kansas City, Mo.

In comments provided to the NAIC for this hearing, PCI cites confidentiality concerns and indicates that the data call would be both costly and unnecessary.

“The committee’s stated justification for the data call is the need to develop a repository for information about the use of insurance scores for public policymakers, yet such a repository already exists in the form of numerous private and public studies on insurers’ use of credit information,” said Alex Hageli, PCI’s director, personal lines. “We do not feel the information garnered from this data call, even if it could be accurately aggregated, adds in any appreciable way to the existing body of studies. It certainly does not add enough to justify the massive expense insurers will incur in replying to the data call, which ultimately harms consumers.”

Regarding confidentiality concerns, PCI notes that member companies are strongly and justifiably concerned about the prospect of revealing to their competitors which underwriting and rating factors they use.

“Insurance is a highly competitive industry, and companies expend great effort and resources to try and distinguish themselves from their competitors,” Hageli said. “This data call is unnecessary and burdensome for insurers and does not provide any consumer benefit.”