Massachusetts Insurance professionals are confident that a law will soon be passed to ban the predatory rating practice of using credit score for rating purposes. These rating practices are not being used in this state, or on a very limited basis. Currently, Massachusetts insurance regulators are not approving rate filings from insurance companies that are using these predatory practices for Massachusetts Auto Insurance.
MAIA the Massachusetts Association of Independent Agents believes that it is important to put a law on the books preventing lobbyist and special interest groups from having an effect on this practice in the future. Many of the large insurance companies such as Nationwide and Geico regularly use predatory rating systems to charge higher rates based on credit, education, and occupation.
“In our opinion, the use of credit, education, the occupation in the rating and underwriting of auto insurance is unfair and discriminatory,” MAIA President Mancini said.
“Those socioeconomic factors — credit, education, occupation — have nothing to do with the way people drive. This is not a new position. We’ve said for many years that a person’s auto insurance rate should be based primarily on their driving records and their driving experience,” he stated.
MAIA is lobbying for a ballot question for the 2012 election to let the people of Massachusetts decide, but they may not have to wait that long. MAIA is working with like-minded legislators to pass a bill banning these practices.