News

FOR IMMEDIATE RELEASE

Tuesday, March 29, 2005

Contact: Rep. Morris Hood III

Phone: (517) 373-3815

Contact: Rep. Marsha Cheeks

Phone: (517) 373-0844

Contact: Rep. Gabe Leland

Phone: 373-6990

Contact: LaMar Lemmons Jr.

Phone: 373-0106

Contact: LaMar Lemmons III

Phone: 373-1776


LANSING - State Representatives Morris Hood III (D-Detroit, Dearborn), Marsha Cheeks (D-Detroit), Gabe Leland (D-Detroit), LaMar Lemmons Jr. (D-Detroit) and LaMar Lemmons III (D-Detroit) denounced a lawsuit filed against the state to block new rules that would prohibit insurance companies from using an individual's credit history to set rates.

Rep. Hood called the Insurance Institute of Michigan's lawsuit a desperate attempt to stall the rule and to use the court system to undermine consumer protection for Michigan's residents. Rep. Hood said insurance companies should use driving records or other relevant factors to set rates.

"Credit reports are notoriously inaccurate, even differing from one reporting company to another" Rep. Hood said. "Unless the Insurance industry can produce evidence that a good credit score will reduce losses, the way a clean driving record or an air bag will, then using them to provide discounts is simply illegal in Michigan. Commissioner Watters has made the correct ruling, and a court challenge, in my opinion, is a frivolous imposition on our already overburdened court system."

The state Office of Financial and Insurance Services will implement the new rules on July 1. Along with outlawing insurance credit scoring, the rules also require companies that used the method to reduce their base rates by the difference between the premium they collected in 2004 and what they would have collected without the credit score discounts.