New Brunswick releases discussion paper on credit scoring, suggests wiggle room in proposed ban on residential property lines

New Brunswick’s superintendent of insurance has issued a discussion paper on credit scoring, in which the regulator says the use of credit scoring for underwriting auto insurance should be banned, but it is willing to discuss the appropriateness of applying the same measures to residential property insurance.
New Brunswick has introduced Bill 43, which creates new statutory prohibitions against using underwriting or rating factors related to credit that are identified in the legislation. They are:
•    the level of income of a person who would be insured;
•    the gross net worth of a person who would be insured;
•    the indebtedness of a person who would be insured;
•    the fact whether a person who would be insured has a credit card;
•    the indebtedness of a person who would be named as an insured person under an insurance contract; and
•    the fact that a person who would be insured made late or dishonoured premium payments for auto insurance that was not terminated as a result of these payments.
The regulator said these factors “will be prohibited for private passenger automobile insurance and will likely be prohibited for residential property insurance.”
But on the residential property insurance side, the discussion paper said the regulator is still willing to consider “the appropriateness of applying these factors [listed above].”
“At this time, New Brunswick…believes that the use of credit history, credit rating, credit score or credit-based insurance score for rating purposes for residential property should be prohibited, but is prepared to review proposals from industry on rating mechanisms that provide consumers with true discounts.”
All submissions are to be made to the New Brunswick Office of the Superintendent by no later than May 14 at the following address:
Insurance Branch, PO Box 6000, Fredericton, NB, E3B 5H1