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Tue April 7, 2009
Regulator battles industry's use of credit scores
By Rick Pluta, Michigan Public Radio Network
East Lansing, MI – Rick Pluta, Michigan Public Radio Network
Michigan's top insurance regulator is challenging homeowner's insurance rates that were set using the clients' credit scores.
The state Office of Financial and Insurance Regulation has notified three companies that it's rejected their rate requests.
The agency says there's nothing in Michigan's insurance code that allows companies to look at their clients' credit scores.
But the insurance industry says credit scores are commonly used in many states, and are an accurate way to assess the risk of customers filing expensive claims.
The debate is part of an ongoing battle between Governor Granholm's administration and the insurance industry on the use of credit scores.
The industry has sued the state to stop it from unilaterally adopting rules that bar the use of credit scores to set rates.