June 23, 2009 by Canadian Underwriter
The Insurance Brokers Association of B.C. (IBABC) has asked the B.C. government for legislative changes that would prohibit insurers’ ability to collect information for the purpose of credit scoring.
“Our position is that we don’t want credit scoring to be an underwriting factor in B.C., and the best way to ensure that is to prohibit it by statute,” Trudy Lancelyn, deputy executive director of IBABC, said in an email.
IBABC observes on its Web site that Alberta’s superintendent of insurance in December 2008 issued a notice that insurers could be fined up to Cdn$25,000 for requiring a customer to consent to a credit report as a condition of obtaining a policy premium quote.
In Ontario, brokers have asked their provincial government to issue a ban on using credit scoring for the purpose of underwriting home insurance. Ontario insurers are currently not allowed to use credit scoring in auto insurance.
“While IBABC is not aware of credit-scoring abuses with insurance transactions in B.C., the IBABC is concerned that current legislation actually enables the practice,” IBABC says in an online posting.
Canadian privacy legislation requires consumers to provide informed consent for the use of information beyond that which is required to fulfill specified purposes.
“But some financial institutions collect blanket consent to share information with their other operational divisions and for undisclosed purposes,” IBABC says.
IBABC has urged the B.C. government “to increase consumer protection by aligning and strengthening the Personal Information Protection Act regarding [the issue of] blanket consent.”
The association also seeks to “amend” sections 107, 108 and 110 of Part 6 (Credit Reporting) of B.C.’s Business Practices & Consumer Protection Act, which currently allow insurance credit scoring.