Delaware Business Insurance Update from CNC Insurance Associates Inc. "Delaware Legislature Impose New Rating Restrictions on Auto Insurers" 7-4-17

The Delaware legislature just passed a new bill that would prohibit insurance companies form using certain aspects of credit scoring when pricing auto insurance. For many years the insurance industry has used credit based scoring to determine rates. Many jurisdictions have questioned the validity of this practice and few have even called it discriminatory. Now, in Delaware , insurance companies will no longer be able to apply certain credit scoring parameters to their insurance auto rates. Credit based scoring on income, gender, education, address, race, ethic group, marital status, etc. is now prohibited.
In addition the insurance companies cannot cancel or non renew due to lack of credit information or credit worthiness. 
Consumer groups are applauding this measure, however, this may be a future problem for the auto insurance marketplace in Delaware.  Insurance companies are reeling with increasing claims in auto and the profits in this line of insurance is dropping nationwide. With a very small market opportunity in Delaware, the concern may be that taking away rating "tools" like credit scoring, may force insurance companies in Delaware to go elsewhere. This would lower the choice Delaware consumers would have in the auto insurance market.  Only time will tell, so keep an eye on this one folks. Until next time be careful out there and know your risks.

G. Kevin Nemith. President CNC Insurance Associates Inc. & The Business Insurance Center
Serving DE, MD, PA, NJ, & VA
www.cncinsurance.com
www.bizinsurancetv.org

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