US credit-based insurance score regulation

Overview

In the United States, auto insurers frequently utilize a credit-based insurance score (CBIS) to predict claim likelihood and determine premium costs. While this metric shares data factors with standard FICO scores—such as payment history and debt levels—it is a distinct proprietary tool used by approximately 95% of U.S. insurers in states where the practice is legal.

Major financial institutions use credit bureau data for lending, but insurers apply these metrics specifically to underwriting and pricing. This has created a patchwork regulatory landscape across the country. While the practice remains widespread, an increasing number of states are moving toward restricting or prohibiting the use of credit data in insurance pricing due to concerns regarding fairness and the financial impact on lower-income drivers and communities of color.

Entities

National Association of Insurance Commissioners · Chase Bank · United States · Discover · FICO

Timeline

1 day ago

[BUSINESS] 4 sources
Credit-based insurance scores impact US auto insurance rates
Most U.S. auto insurers use proprietary credit-based insurance scores to set premiums, though some states are restricting the practice to address fairness concerns.
8 days ago

[BUSINESS] 5 sources
Credit scores and insurance premiums
Insurers and banks use credit data differently; insurers often use credit-based insurance scores to set premiums, while banks like Chase and Citibank use bureau data to approve credit cards.

Sources

abc17news.com · gaia.com · kesq.com · keyt.com · krdo.com · kvia.com