An Act Prohibiting Insurance Companies From Using Territorial Rating And Credit Histories As Factors In Underwriting Or Rating Private Passenger Nonfleet Automobile Insurance Policies.
Impact
If enacted, HB 6687 would amend existing state insurance laws, specifically section 38a-686 of the general statutes, to restrict how insurers can evaluate applicants for automobile insurance. The prohibition against using credit histories and territorial ratings could lead to significant changes in how insurance premiums are calculated, promoting fairness and reducing potential discrimination against individuals in higher-risk areas or those with lower credit ratings. This measure is expected to attract a diverse range of policyholders who previously faced higher rates due to these factors.
Summary
House Bill 6687 aims to prohibit insurance companies from using territorial rating and an individual's credit history when underwriting or rating private passenger nonfleet automobile insurance policies. The core intention of this bill is to enhance consumer protection by ensuring that insurance decisions are not adversely influenced by factors that may be beyond the control of the policyholder. By eliminating these criteria, the bill seeks to make automobile insurance more accessible and affordable for all drivers, regardless of their credit background or location.
Contention
There may be points of contention surrounding this bill, primarily from the insurance industry, which may argue that credit histories and location are relevant indicators of risk. Insurers could raise concerns that eliminating these criteria may lead to higher premiums for the overall pool of insured drivers to compensate for the perceived increased risk. Opponents of the bill in the insurance sector are likely to emphasize the importance of maintaining robust underwriting practices to ensure the financial stability of insurance providers. Nonetheless, advocates for the bill, including consumer protection groups, argue that it is essential to eliminate biases that do not accurately reflect an individual's driving capabilities and history.
An Act Concerning Insurance Market Conduct And Insurance Licensing, The Insurance Department's Technical Corrections And Other Revisions To The Insurance Statutes And Captive Insurance.