Insurance Brokers Call for Comprehensive Ban on Credit Scoring Practices

    Brokers warn more must be done to protect consumers

    TORONTO, May 28 /CNW/ - The Insurance Brokers Association of Ontario
(IBAO) and member brokers were at Queen's Park recently to call for a complete
ban on the use of credit information when rating or underwriting insurance
    Current auto insurance regulations prohibit insurers from using certain
financial and other 'lifestyle' information when underwriting policies but do
not prohibit insurers from asking questions about financial information which,
when asked, can put consumers at a disadvantage. There are no rules against
the use of credit for other personal lines property and casualty (P&C)
insurance products.
    "The use of credit is not in the best interests of consumers and is
unacceptable," said IBAO Chairman of the Board, Rodney Hancock. "The only way
to protect the interests of consumers is to have a complete ban and that means
expanding current regulations in the Insurance Act that protect consumers from
unfair or deceptive practices to include the use of credit."
    Ontario's independent insurance brokers have long championed a full
prohibition on use of credit information and were pleased to see the Financial
Services Commission of Ontario (FSCO) issue a bulletin this past February that
warned insurers about the rules regarding its use. But increasingly the
association is hearing from consumers whose efforts to obtain insurance
coverage or an insurance quote has been delayed or hindered because of their
credit history or their refusal to grant access to the information.
    "We're seeing more and more occasions where insurers are using credit
scores behind the scenes to segment prospective customers," continued Hancock.
"The misuse of credit scores excludes eligible drivers and home owners from
finding the most economical insurance coverage. In many cases, the people that
suffer the most, newcomers, single families, the unemployed, and entrepreneurs
who have taken out significant loans to start or grown existing businesses are
the ones who cannot afford to be punished."
    The FSCO is currently conducting a 5-year review of the rules and
regulation that govern auto insurance in the province. Ontario's brokers are
pleased to support the recommendation for the prohibition of the use of credit
information when determining auto insurance rates, but are urging the Ontario
Government to implement a full ban for all personal lines P&C insurance
    "In order to put the interests of Ontario's insurance consumers first, a
ban on using credit ratings should, in addition to auto insurance, include
personal line property and causality insurance products." added Hancock. "We
must protect consumers for all their insurance needs, not just auto

    The Insurance Brokers Association of Ontario (IBAO) is a 'not for profit'
association that represents and serves the interests of over 10,000
independent Property & Casualty Insurance Brokers in the Province of Ontario.

For further information:

For further information: Emilie Smith, IBAO Public Relations, (647)

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Insurance Brokers Association of Ontario (IBAO)

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