November 30, 2009 by Canadian Underwriter
The Canadian Association of Direct Response Insurers (CADRI) “welcomes” the results of the Canadian Council of Insurance Regulators (CCIR)’s questionnaire on credit scoring and insurance industry practices.
On Nov. 16, 2009, CCIR released the results of its survey. Of the findings, 42% of Canadian property and casualty companies that use credit-based insurance (CBI) scores — representing 17% of market share — do not disclose an adverse affect of the CBI scores to policy applicants or policyholders, according to a survey done for the Canadian Council of Insurance Regulators (CCIR).
“We are pleased to see that the questionnaire results overall indicate that the industry is using credit-based insurance scoring in a fair and responsible manner,” said Francois Boulanger, CADRI’s chair.
“This is an important and valid tool for insurers to help us evaluate risk and we are committed to making sure it is used properly in the industry.”
The survey shows “the growing acceptability of creditworthiness as a valid predictor of insurance risk,” a CADRI release says.
“With the majority of respondents using or intending to use credit scoring, consumers will see a fairer and more accurate assessment of risk across all insured [lines].”