FTC Orders Nine Insurers to Submit Information for Study of the Effect of Credit-Based Insurance Scores on Consumers of Homeowners Insurance
Dec 23, 2008
Pursuant to statutory requirements to study the use and effect of credit-based insurance scores on the availability and affordability of automobile and homeowners insurance, the Federal Trade Commission (“FTC”) issued orders to nine major insurers today, December 23, 2009, to produce certain information by April 24, 2009.
To view the text of the FTC Orders, click here.
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FTC Orders Nine Insurers to Submit Information for Study of the Effect of Credit-Based Insurance Scores on Consumers of Homeowners Insurance
The Federal Trade Commission has ordered nine insurance companies to produce information for a study on the use and effect of credit-based insurance scores on consumers of homeowners insurance. The FTC issued the orders pursuant to Section 6(b) of the Federal Trade Commission Act.
The orders require information from the nine largest private providers of homeowners insurance, which have roughly 60 percent of the homeowners insurance market in the U.S.: State Farm Mutual Automobile Insurance Company, The Allstate Corporation, Fire Insurance Exchange, Nationwide Mutual Insurance Company, The Travelers Companies, Inc., United Services Automobile Association, Liberty Mutual Holding Company, Inc., The Chubb Corporation, and American Family Mutual Insurance Company.
The FTC is required to study the use and effect of credit-based insurance scores on the availability and affordability of automobile and homeowners insurance under Section 215 of the Fair and Accurate Credit Transactions Act (FACTA), 15 U.S.C. § 1681 note (2003). In May 2008, the Commission authorized the use of compulsory process in the homeowners insurance study (http://www.ftc.gov/opa/2008/05/comprofyi.shtm) and posted for public comment a draft model order to obtain data for the study. Based upon comments received, the FTC developed final orders that maximize its research capability while minimizing any unnecessary burden on insurers participating in the study. The affected companies have until April 24, 2009 to respond.
The Commission vote to issue each of the orders was 4-0. Copies of the orders can be found as links to this press release on the Commission’s Web site.
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