Connecticut House Bill HB05427

Connecticut 2019 Regular Session

• Introduced: 1/16/19
• Refer: 1/16/19

Caption

An Act Prohibiting Insurance Companies From Using Credit History As A Factor In Underwriting Or Rating Private Passenger Nonfleet Automobile Insurance Policies.

Impact

If enacted, HB 5427 would significantly alter how insurance companies assess risk and determine premiums for automobile insurance within the state. By disallowing the use of credit history, the bill seeks to ensure that all drivers are treated fairly, regardless of their financial history. It could lead to more equitable pricing structures, particularly benefiting individuals from marginalized backgrounds who often find themselves paying higher premiums due to credit-related factors rather than actual driving risk.

Summary

House Bill 5427 aims to prohibit insurance companies from considering an applicant's or insured's credit history when underwriting or rating private passenger nonfleet automobile insurance policies. This legislative move is intended to protect consumers from potential discrimination that may occur due to their credit scores, which do not necessarily reflect their driving behavior or risk levels. Proponents argue that using credit history in this manner can lead to inflated insurance premiums, unfairly impacting those with lower credit scores or financial instability.

Contention

Despite the intended consumer protections, there may be contention surrounding the bill. Opponents could argue that excluding credit history from the underwriting process may limit insurance companies' ability to assess risk accurately, potentially leading to higher overall costs for insurance providers. This, in turn, may result in increased premiums for insureds who present a greater risk based on other factors. The balance between protecting consumers and allowing insurers to maintain sound risk assessment practices is likely to be a focal point of debate during the bill's consideration.