The Property & Casualty Insurance (C) Committee and Market Regulation & Consumer Affairs (D) Committee met Sept. 23, 2009. During this meeting, the committees discussed comments received on the concept of regulating entities providing credit-based insurance scores as advisory organizations.

Dave Snyder (American Insurance Association) testified that the personal lines market is competitive, and there have not been a large volume of consumer complaints regarding credit-based insurance scores. In response to these comments from industry, regulators raised questions about the volume of complaints made to credit bureaus and suggested this would be a better measurement of consumer concern.

Lamont Boyd (FICO) testified that FICO provides credit-based insurance scoring models but does not provide the services of an advisory organization. Mr. Boyd indicated that FICO has 27 national models for insurance companies to use, and these models are modified for use depending on the state in which they are used.

Jon Burton (Reed Elsevier) testified on behalf of LexisNexis. Mr. Burton said LexisNexis is subject to regulation, and the models created by LexisNexis are already reviewed by state insurance regulators.

Alex Hageli (Property Casualty Insurers Association of America) said his association is opposed to having entities that provide credit-based insurance scores being regulated as advisory organizations. He said these entities are already regulated at both the state and federal level.

Birny Birnbaum (Center for Economic Justice) testified that entities that provide credit-based insurance scores should be regulated as advisory organizations. He said states should be focusing on collecting additional data on how credit-based insurance scores are impacting consumers. He said consumers have seen a decrease in available credit, and delinquencies are at an all time high. Mr. Birnbaum said the objective facts indicate that credit scores are decreasing.

Bonita Kallestad (Mid-Minnesota Legal Assistance) requested state regulators to place a moratorium on the use of credit-based insurance scores.

The committees decided to pursue the collection of additional data to determine the extent to which credit-based insurance scores are impacting consumers. As part of this effort, the committees agreed to reach out to both companies and consumers to determine what data points should be collected and analyzed.

The committees tentatively scheduled a conference call in four weeks to discuss a proposal on the data to be requested.