LANSING, Mich. – Commissioner Frank Fitzgerald of the Michigan Office of Financial and Insurance Services issued a bulletin that requires insurance companies operating in the state to provide consumers with more information about the use of credit to determine insurance rates. Michigan insurance companies must begin implementing the changes on July 1, 2003, and complete actuarial justification by June 30, 2004. In announcing the new bulletin, Fitzgerald noted that the lack of information available to consumers about the use of credit information to set insurance rates is the cause of their overwhelming concern about how the information is used. "With the Bulletin I signed today, insurance companies doing business in Michigan that establish consumer credit scores to set insurance rates will have to recalculate scores annually or when a consumer corrects their credit history, provide detailed information about the company's use of credit, and justify the company's use of credit scoring," he said. The Bulletin requries insurance companies using a discount based on consumer credit information to: *recalculate and apply a policyholder's insurance credit score at least once annually; *annually inform auto and homeowner policyholders or applicants of the credit score used to apply an insurance credit scoring discount, and the discount tier in which the insured or applicant is placed; *recalculate an insurance credit score and apply an appropriate discount if a policyholder successfully disputes information on their credit history; *actuarially certify the discount granted to policyholders or applicants with no credit history or whose history doesn't reveal all the credit factors used by the company's formula to determine the insurance credit score. The certification must occur for any new coverage or renewed coverage effective on or after Jan. 1, 2004 and must subsequently be on an annual basis. *file the formula used to apply the discount with OFIS by July 1, 2003 for any new coverage or the renewal of coverage effective on or after that date; *file the specific credit classification factors used to calculate an insurance credit score with OFIS. *file an actuarial certification justifying the discount levels and discount tiers offered by the company with OFIS; Fitzgerald said, "By formally notifying insurance companies of their obligations under the federal Fair Credit Reporting Act, OFIS will be able to cite violations of the FCRA in investigations and enforcement actions." He encouraged consumers who suspect their insurance company has inappropriately used credit information, to file a complaint with OFIS. -

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