CCIR offers no solution to credit scoring issue | Canadian Insurance

CCIR offers no solution to credit scoring issue

Canadian Council of Insurance Regulators will not make recommendations on the issue

The Canadian Council of Insurance Regulators (CCIR) has released the findings of its Credit Scoring Working Group (CSWG) and the results will not please brokers.

Due to a lack of evidence, the CSWG has decided against making any recommendations on the use of credit scores by insurers.

In 2009, the CCIR established the Credit Scoring Working Group (CSWG) to gather evidence into the use of credit-based insurance scores. In 2011, the group sought comments from the public on its issues paper, Use of Credit Scoring by Insurers, but failed to receive a single response from consumer groups or individuals.

Read: Canadian Insurance Top Broker’s recap of all the stories relating to credit scoring

The submissions that the CSWG did receive were largely from two groups: insurers, who are for the continued use of credit scoring, and brokers, who are against it.

“In both cases, the CSWG felt that these opinions were put forward with little supporting evidence. CSWG has found it impossible, therefore, to make conclusive recommendations to jurisdictions based on the consultation,” stated the CCIR release. “We have a preponderance of opinion but a dearth of fact as to the actual and current, rather than potential, harms that may be accruing to consumers from the use of credit scores by insurers.”

The CSWG, ultimately, left the decision to government policymakers but assembled a Findings Report to summarize the facts and industry opinions.

“Its purpose is to provide background for policymakers and regulators who may be dealing with this issue in the future. It is intended to be the final publication of the CSWG.”

In April, the Insurance Brokers Associate of Ontario (IBAO) released its consumer research findings, which found that 78% of Ontarians were not aware that insurers were using credit scores to price their home insurance. The IBAO used the research to call on the Ontario government to ban the use of credit scoring on personal property insurance.