TORONTO, June 17, 2011 /CNW/ - The Canadian Council of Insurance
Regulators (CCIR) is seeking comments from the public on its issues
paper, released today, entitled Use of Credit Score by Insurers.
This issues paper documents CCIR's understanding of insurers' use of
credit-based insurance scores. It identifies what we see as consumer
risks that can potentially arise from the use of credit scoring in
underwriting based on our desired regulatory outcomes: that consumers
are treated fairly and can make informed decisions. It then assesses to
what extent these outcomes are already addressed under existing law,
which may vary from jurisdiction to jurisdiction.
CCIR is seeking the views of consumers and the industry on
Whether all potential risks described in the paper have been identified,
Whether the potential risks identified are already addressed under law,
and if so, how.
There are differing views between jurisdictions and between stakeholders
regarding the use of credit-based insurance scores. Some groups have
proposed eliminating its use arguing it is not fair to consumers, while
others defend its use as a valid actuarial tool to underwrite and price
insurance. The paper is neutral and makes it clear that the question of
whether or not to ban the use of credit-based insurance scores goes
beyond the scope of CCIR's review. Ultimately, this is a government
decision dependent upon a combination of political and socio-economic
conditions within a jurisdiction, and a jurisdiction's level of
tolerance in relation to any potential risk identified.
To view the paper and find information about commenting, visit CCIR's
CCIR brings together provincial and federal insurance regulatory
authorities to work cooperatively toward solutions to common regulatory
issues. In the spring of 2009, there was considerable media attention
about the use of consumer credit information by insurance companies.
The CCIR decided to establish a Working Group with a mandate to
research and gather the facts surrounding credit-based insurance scores. This work is in alignment with CCIR's strategic priorities of
identifying common emerging issues (fact gathering), and engaging
stakeholders and policy makers so that the right information is in the
hands of those in charge of making policy decisions. It is also in
alignment with CCIR's risk-based approach to regulation.
SOURCE Canadian Council of Insurance Regulators
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