Connecticut House Bill HB05510

Connecticut 2013 Regular Session

• Introduced: 1/22/13
• Refer: 1/22/13

Caption

An Act Prohibiting The Use Of Credit Histories As A Factor In Underwriting Or Rating Private Passenger Motor Vehicle Insurance Policies.

Impact

If enacted, HB05510 would amend Title 38a of the general statutes, significantly affecting how insurance companies determine rates for private passenger motor vehicle insurance. Insurance providers would need to find alternative methods for assessing risk, which could lead to a range of outcomes, potentially benefitting those with lower credit scores. This reform could enhance accessibility to insurance for a broader segment of the population, thereby promoting equity in the automotive insurance landscape.

Summary

House Bill 05510 aims to prohibit the use of an applicant's credit history when underwriting or rating private passenger motor vehicle insurance policies. This legislative move reflects a growing understanding of the potential negative impact that credit-based insurance scoring can have on consumers, particularly those from disadvantaged backgrounds. By removing credit history as a factor, the bill intends to create a fairer insurance marketplace that better aligns with the actual driving risk of individuals rather than their financial history.

Contention

While proponents of the bill argue that it enhances consumer rights and fairness, critics may raise concerns regarding the feasibility of implementing alternative risk assessment methods. There is a debate on whether this move might lead to increased premiums for certain demographic groups if insurers cannot use credit history as a variable. The discussion around this bill is indicative of a larger trend toward consumer protection reforms, which also raises questions about how insurance companies will adapt to these legislative changes and what implication it will have on pricing strategies in the long term.