New Brunswick is amending its Insurance Act to prohibit the use of credit scoring for underwriting and rating practices in all classes of insurance.
“Regulations will prohibit using credit scoring for underwriting and rating of property and casualty insurance, including automobile insurance,” the government announced in a press release. “New Brunswick will become the first province to introduce such prohibitions.”
Alberta and Ontario prohibit the use of credit scores, but only for automobile insurance.
In explaining the rationale for its ban, the province cited consumers’ and regulators’ concerns about the increased use of credit scores for underwriting and rating. It said it was amending the rules to ensure fairness and access to insurance for all consumers.
"It is patently unfair for persons who may have missed a payment on a loan at some point in their lives to have that reflected on their insurance premiums," Kelly Lamrock, minister of justice and consumer affairs, as well as attorney general, said in a press release.
"Further, there are many circumstances that have little or nothing to do with a person's ability to manage his or her finances — including identity theft, sudden family or medical crises, sudden unemployment or other catastrophic events."