June 17, 2008 by Canadian Underwriter
The Insurance Brokers Association of Ontario (IBAO) has asked the Financial Services Commission of Ontario (FSCO) to look into whether insurers are using credit scoring and, if so, whether they are using credit scoring for the purpose of determining auto rates.
FSCO’s regulations currently ban the use of credit scores to determine automobile rates in Ontario.
IBAO’s position is that all insurance companies must abide by the spirit and the letter of this regulation, IBAO president Rodney Hancock notes in the association’s newsletter.
“IBAO believes that the ‘playing field’ must be level for all insurers and that this is the best interest of consumers and all stakeholders,” Hancock writes. “However, we know many insurers are collecting credit scores. While it seems clear many insurers use credit in various ways, it is difficult to understand exactly how the credit score is being used.”
The IBAO has met with FSCO and voiced its concerns about the use of credit scoring and provided supporting documentation, Hancock writes.
“FSCO listened to our concerns and will investigate these issues to ensure that transparency and disclosure guidelines, in addition to the regulations, are followed,” Hancock continues. “You can be certain IBAO will continue to pursue this matter in the coming months.”