David Snyder of the American Insurance Association (the “AIA”) gave testimony to the New Jersey State Senate Commerce Committee regarding the AIA’s opposition to Senate Bill 2766. Mr. Snyder stated, “The use of insurance scoring has been demonstrated to improve risk assessment in personal lines and to expand availability because it gives companies enhanced ability to assess and price adequately for risk. As a result, the vast majority of auto and homeowners insureds benefit from lower rates because of its use, as permitted and regulated in New Jersey.” Therefore, according to Mr. Snyder, “Banning or over-regulating the use of credit-based insurance scoring, as Senate Bill 2766 would do, will negatively affect the majority of New Jersey auto and homeowners policyholders . . . .”
New Jersey Senate Considering Ban on Credit-Based Insurance Scoring
On May 4, 2009, New Jersey State Senator Nia H. Gill introduced Senate Bill 2766 into the New Jersey State Senate to temporarily prohibit the use of credit-based insurance scoring by property-casualty insurers in rate-making for personal lines insurance coverage. The bill, as currently drafted, would suspend such use of credit-based insurance scoring until June 30, 2011.
