Democrats in Maryland House of Delegates advance auto insurance bill with industry amendment

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The amendment was provided by the National Council of Insurance Legislators, an industry-friendly organization. It was approved 13-7, with Democrats voting to support the measure and Republicans opposing it.

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A measure to help consumers by banning the use of credit histories by car insurance companies was approved by the House of Delegates on Friday, but not before being significantly amended in committee.

As originally written, House Bill 436 would have prohibited insurers from taking a motorist’s credit score into account when setting their premiums. Current law already prohibits companies from using credit history to decide whether or not to offer coverage to an individual driver.

The measure, sponsored by Del. Melissa Wells, D-Baltimore, aims to protect people with lower than normal credit scores from having to pay more to insure their vehicles. Proponents say such policies punish those at the bottom of the socio-economic ladder.

But the insurance industry vigorously defends the use of credit scores, saying they are an accurate indicator of an individual’s likelihood of submitting a claim. Industry representatives also argue that credit score is just one of many factors that determine a motorist’s premium. Maryland has a more competitive insurance market because credit scores can factor into pricing, they insist.

The House Economic Affairs Committee amended Wells’ bill On Thursday, eliminating the ban and adding language that would allow companies to reduce rates if a consumer has suffered a “catastrophic event”, illness, death of a family member, loss employment or some other factor.

Motorists’ claims to insurance companies must be submitted in writing, and any relief provided, in the form of lower premiums, is at the “sole discretion” of the insurer.

The amendment was provided by the National Council of Insurance Legislators, an industry-friendly organization. It was approved 13-7, with Democrats voting to support the measure and Republicans opposing it.

“That’s definitely not what I wanted to happen to the bill,” Wells said after the committee voted. “There was nothing in the books before anyone could use it. So it will at least give some respite (compared to the high bounties), but there is still a lot to do. »

The 93-40 vote on the House floor also broke largely along party lines.

A measure identical to Wells’s, House Bill 690, was unanimously rejected by the Economic Affairs Committee. This bill was sponsored by Del. Jay Jalisi (D-Baltimore County), a lawmaker who remains out of favor with his colleagues after his 2019 reprimand for abusing his State House staff.

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