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IIABA Urges Insurers to Be More Consumer-Friendly by Fixing Anomalies in Use of Credit Information

Use of Credit-Related Scores Is Legitimate, But It Should Be Fair

ALEXANDRIA, Va., Oct. 24 - As insurers increasingly rely on consumer credit histories and credit-related scores during the underwriting and rating process, the Independent Insurance Agents and Brokers of America (IIABA) urges companies to proactively adopt and implement fair-minded and appropriate business practices regarding their use of credit information.


“IIABA recognizes that consumer credit information is a powerfully predictive tool for insurance companies, but independent agents and brokers firmly believe that such information must be used in sensible, balanced and consumer-friendly ways,” says IIABA Past President Thomas B. Ahart, CPCU, AAI, chairman of IIABA’s state government affairs committee. “The use of credit-related scores by insurers has been controversial at times, and as an industry we want to work with our company partners to replace this controversy with reason and responsibility.” 


IIABA has released a Board-approved policy statement regarding the use of consumer credit information and credit/insurance scores in light of the ongoing debate about insurer use of this information and the proper role of regulation.


“IIABA supports the use of underwriting and rating tools that foster enhanced competition and the fair and accurate pricing of risk,” says Wes Bissett, IIABA vice president of state government affairs. “But the policies and underwriting practices of some companies using credit information have been a problem for some consumers and agencies, resulting in legitimate concern and skepticism among policyholders, policymakers and independent agents and brokers.


“There are several simple steps that IIABA believes insurers should take to restore confidence in credit scoring practices,” Bissett adds. Among them:

  • In the event that an adverse action is taken due to a consumer’s credit history, provide the consumer with a list and meaningful description of the primary factors for that determination.
  • Treat an individual’s lack of credit history or credit-related score neutrally or otherwise refrain from penalizing such consumers.
  • Consider other applicable underwriting factors beyond credit information or credit-related scores when evaluating whether to underwrite, deny, cancel or non-renew insurance policies.
  • Re-underwrite and re-rate a consumer’s insurance policy within 30 days after being notified by a credit bureau of a correction in his or her credit history.
  • Hold agents harmless from civil and administrative actions and liability, costs and fees when those agents’ actions are consistent with company procedures.


IIABA also calls on credit bureaus, credit reporting agencies and providers of credit-related scores to:

  • Recognize that independent agents and brokers own their expirations, and therefore not share, sell or otherwise utilize any data or information provided in the credit scoring or insurance application process for any purpose other that that for which it is provided.
  • Recognize the importance of maintaining accurate records and undertake efforts to ensure that data is current and correct.


The entire IIABA policy statement regarding use of consumer credit information and credit/insurance scores is available at


IIABA also has worked with Illinois state representative Timothy H. Osmond (R), the National Conference of Insurance Legislators (NCOIL), and others in the industry to develop consensus amendments to NCOIL’s proposed Model Act Regarding Use of Consumer Credit Reports in Insurance. This proposal, which will be considered as an amendment in the form of a substitute, will be considered during NCOIL’s annual meeting next month. IIABA urges prompt action in November on the model that would benefit insurers and consumers alike.


“Use of consumer credit information has become commonplace in the insurance industry because it is a proven underwriting tool,” notes Bissett. “But policymakers and consumers have raised legitimate concerns about the manner in which some consumers slip through the cracks through no fault of their own. IIABA and many others in the insurance industry have responded by developing a reasonable proposal that attempts to strike the right balance between the concerns of consumers and the needs of the industry.”


Founded in 1896, IIABA is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life and health—as well as employee benefit plans and retirement products. Web address:



​127 South Peyton Street
Alexandria VA 22314
​phone: 800.221.7917
fax: 703.683.7556

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