High court to determine use of credit scores

By Rick Pluta, Michigan Public Radio Network

East Lansing, MI – East Lansing, MI (MPRN) - The state Supreme Court has agreed to decide whether insurance companies can use credit scores to help set their customers' rates for auto and homeowners' coverage.

The state's highest court is stepping in to settle a long-running feud between Governor Granholm and the insurance industry over using credit scores to set rates.

The governor says using credit scores is arbitrary, and doesn't accurately reflect the risk that a customer will file a claim.

Her Office of Financial and Insurance Regulation has tried to bar insurance companies from using credit scores.

That's why the industry challenged the state in court with mixed results.

Insurance companies say they have studies that show a connection between how people manage their credit, and how they handle risk.

This will be one of the first cases the state Supreme Court will hear when it opens a new session in October.