Massachusetts Governor Duval Patrick signed H. 3795, which bans the use of credit-based insurance scores in the underwriting and rating of private passenger automobile insurance, into law on November 22, 2011 as Chapter 195 of the Acts of 2011.  H. 3795 amends the Massachusetts General Laws and codifies a similar credit score prohibition in current Division of Insurance Regulations.  The enactment of H. 3795, effectively prevents future administrations from doing away with the prohibition without having to go through the legislature.

Commissioner of the Massachusetts Division of Insurance Joseph G. Murphy has told media sources that H. 3795 benefits consumers, as it ensures that rates for personal automobile insurance will be based on driving records rather than credit worthiness.  According to the Commissioner, this will provide consumers with more choices and lower costs for their auto insurance.  However, insurance industry trade groups lobbied against the credit scoring ban, stating that a consumer’s credit score is one of the best indicators of risk, and contend that the use of credit scores tends to result in a lower premiums for auto insurance.

Please click here for a complete copy of H. 3795.