The Federal Trade Commission (FTC) is seeking public comment on a “Model Order to Obtain Data for Study of the Effect of Credit-Based Insurance Scores on Consumers of Homeowners Insurance.” The order would be issued to selected firms that sell homeowners insurance.

FTC’s draft proposed order would require the production of data, documents, and some narrative responses on a variety of topics, including: (1) policyholder data; (2) premium data; (3) basic policy coverage data (e.g., coverage type, limits, deductibles); (4) policy endorsements and additional coverage data; (5) data and information on the use of credit-based insurance scores and credit history; (6) risk data, (7) claims data, (8) application and quote data; and (9) rating manuals and underwriting guidelines. The Commission intends to protect the privacy and security of the
information collected in response to the 6(b) orders to the extent permitted by law.

Then it is the intention of the agency to use this publicly vetted model as the basis of issuing orders to the nine selected homeowners insurance companies to produce information for a study on the use and effect of credit-based insurance scores on consumers of homeowners insurance.

What It Means to Agents:  PIA members through the PIA National Board of Directors have established clear policy expression on the subject of insurance scoring. However, PIA seeks any additional PIA national and state leader comments, especially specific to H/O that should be considered by our policy oversight committees, as PIA drafts its submission to the FTC.

Please forward any comments to patbo@pianet.org for collection, submission and review by the PIA National Business Issues, Federal Affairs and Regulatory Affairs committees, as this affects the insurance technical aspects of underwriting, the federal activities of FTC and the existing application of state insurance laws.

May 20, 2008