Newfoundland and Labrador bans use of credit scoring
Ontario brokers continue to lobby against the practice.
Suzanne Sharma on June 3, 2011
The Insurance Brokers Association of Newfoundland (IBANS) president and treasurer, Basil Crosbie says the association has always had a “simple” stance towards the issue, aiming to inform consumers that their credit scores were being used to measure risk.
“Unless it was clear and simple for the client and consumer to understand, credit scoring would not be a good thing,” he told Canadian Insurance Top Broker in an email. “We understood the arguments for it but without the transparency it would not be good!”
Crosbie further stated the association has never had to lobby the Government to bring in legislation that would ban the use of credit scoring. “They picked up on this and started the ball rolling themselves,” he said.
Ontario Brokers Continue Fight
The current use of credit scoring to measure a person’s insured risk has led to an increase in insurance premiums or an outright denial of insurance to many Ontario citizens, according to the Insurance Brokers Association of Ontario (IBAO).
The association that has been stern in their position about banning this practice because it affects those who can least afford it, including retired seniors, newcomers to Canada, the unemployed, single income families and small business owners utilizing lines of credit.
“Clearly the Newfoundland government moved quickly to address a practice that was not transparent and unfair to consumers,” said IBAO CEO Randy. “We are asking the Ontario government to respond to the concerns of Ontarians and ban this unfair and deceptive practice in our province.”
A survey commissioned by the IBAO in 2010 showed that 3 out of 4 Ontario consumers are not aware their credit scores are being used to determine how much they pay for their home insurance, and 76% of those polled support extending the credit score ban to home insurance.
Also, in May the IBAO launched a consumer educational website, www.SoaringInsuranceRates.ca. Since the launch, about 3,000 Ontarians have logged on to educate themselves about the use of credit scoring. Many have signed the on-line petition to ban this practice and sent letters to their Members of Provincial Parliament.
Print Directory
Order Your Copy of the General Insurance Register Today
The General Insurance Register is the only national sourceguide for all segments of the Canadian P&C industry
Search the Insurance Directory
Morgex Hole in One Category: Wholesaler, MGA, or Intermediary
Totten Insurance Group Category: Wholesaler, MGA, or Intermediary
Trans Canada Insurance Marketing Inc. Category: Wholesaler, MGA, or Intermediary
Creechurch International Underwriters Category: Wholesaler, MGA, or Intermediary
Elliott Special Risks LP Category: Wholesaler, MGA, or Intermediary
