{
  "id": "RS21341",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "RS21341",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 103135,
      "date": "2005-01-19",
      "retrieved": "2016-04-07T19:56:42.768029",
      "title": "Credit Scores: Credit-Based Insurance Scores",
      "summary": "An insurance score, a type of credit score, is a number produced by a computer scoring model\nthat\nanalyzes a person's credit information (i.e., payment history, collections, balances, and bankruptcies)\nobtained principally from that person's credit reports. Increasingly, insurers have been using\ninsurance scores as an underwriting factor to evaluate insurance applications, especially for\nautomobile and homeowners insurance, in predicting possible future insurance claims an applicant\nmight generate. Insurers maintain that there is a clear statistical connection between a person's\ninsurance score and the likelihood of that person filing claims, as well as how expensive such claims\nmight be. By using insurance scores, insurers say that they are able to charge lower premiums to\nmost customers who are better risks. On the other hand, some consumer advocates dispute the\ninsurers' position and argue that the use of insurance scores has a disparate effect on minorities, and\nis merely a new method by which insurers can increase premium rates.\n  Even though credit scores have been widely used for some time by credit-related businesses\nsuch as home mortgage lenders and credit card issuers, the use of insurance scores by insurers is\nrelatively new. The growing discontent regarding the use of credit-based scoring has been reflected\nin proposed legislation amending the Fair Credit Reporting Act to require additional consumer\nprotections, and in increased litigation. Insurance scores, like other credit scores based on credit\nreports, are regulated to some degree at the federal level. Unlike other credit scores, however,\ninsurance scores used in the underwriting process are also subject to state insurance laws and\nregulations. Most of the states have been active in recently reviewing their laws and regulations in\nthis area. Federal legislation in the 108th Congress that would have affected insurance scoring\nincluded  H.R. 1473 ,  H.R. 2796 ,  H.R. 2622 , and\n S. 1753 . The latter two were the House and Senate versions of what would become  P.L.\n108-159 , which mandated a study on the impact of insurance scoring. This report will be updated\nin the event of significant legislative or regulatory developments.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
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      ],
      "topics": []
    }
  ],
  "topics": [
    "Economic Policy"
  ]
}