Michigan is on the verge of prohibiting insurers from using credit scores in calculating premiums, as well as requiring insurers to reduce their base rates for home and auto coverage.
The state's Office of Financial and Insurance Services recently mandated the changes, which a review committee has 15 legislative-session days to consider. The rules will take effect if the committee does not object. If it does object, the Legislature will have 15 session days to pass a bill rejecting the rules.
Michigan regulators first cracked down on insurers' use of credit scores in 2002 when they required companies to reveal and explain the scores to consumers.
Insurers have increased their base rates in recent years to give discounts to policyholders with better credit scores. But the state agency said Tuesday that the practice "does not reduce loss to insurance companies."
