Category: News Briefs Published on Thursday, 08 July 2010 17:03
The Michigan Supreme Court ruled on Thursday to lift the ban that prevented insurance companies from using credit scores to calculate insurance rates.
According to the court’s ruling, under the Granholm administration, the insurance commissioner acted outside their scope of duty by placing a ban on the use of credit scores. In the 4-3 decision, it also permanently blocks any credit scoring rules proposed by the Granholm administration.
Based on the ruling, the insurers were able to prove a direct correlation between credit scores and the probability of a client having a loss.
The use of credit scores cannot be used to determine a person’s eligibility for insurance. However, they will be used to determine discounts, therefore saving consumers money on their auto and homeowners insurance, the insurance companies argued.
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