Informa Insurance News 24
US LOOKS AT INSURERS’ USE OF CREDIT DATA
The US Federal Trade Commission has asked Allstate, Travelers, Chubb, State Farm and five other insurers for information on how they set prices for homeowners’ cover as part of a probe into credit-based insurance scores. The FTC gave the companies until April 24 to respond to the query. The FTC issued the request for data pursuant to a request by Congress in 2003. An FTC study released in 2007 showed that black and Hispanic motorists tended to pay higher rates for motor cover owing to credit-based insurance scores. The American Insurance Association said that the FTC’s request was unnecessary and costly and risked consumers’ privacy. “We are disappointed the FTC chose this route, despite the industry’s good faith efforts to work co-operatively to find a sensible, secure and cost-effective alternative to provide the data the FTC says it needs to conduct its study”, said AIA vice-president and assistant general counsel David Snyder. “The use of a ‘compulsory process’ does not allay our serious concerns about the handling and protection of massive amounts of consumer data”.