TRAVELERS PERSONAL LINES POLICY STATEMENT



[pic]

TRAVELERS PERSONAL INSURANCE POSITION STATEMENT

ON THE USE OF CREDIT HISTORY INFORMATION AND INSURANCE SCORING

Travelers is the second largest U.S. provider of automobile and homeowners insurance written through independent agents. We are committed to providing superior insurance products at competitive prices to our agents and our customers.

Like many insurance companies, Travelers has found that the use of credit-based insurance scores, when used in combination with other traditional underwriting and rating criteria, greatly enhances our ability to meet our commitment to our agents and customers. Insurance scores are predictive of future loss. The research done by insurers, regulators, insurance scoring modelers and independent actuaries establishes the valuable predictive nature of insurance scoring. The use of insurance scores provides us with a greater ability to assess the level of risk a customer presents, and this added confidence provides us with the opportunity to offer coverage to a broader range of customers. In fact, utilizing credit-based insurance scores helps most of our customers obtain a better price for their insurance.

We are mindful of the concerns that continue to be raised by consumers, agents, regulators and elected officials regarding the use of credit history information and insurance scores by insurers. To help address these concerns, we have developed the following policies concerning the use of credit history information and insurance scores in our underwriting and pricing decisions.

Consumer Disclosure

• Prior to ordering credit information or an insurance score in connection with processing a quote or processing an application for insurance, we advise customers that credit information or an insurance score may be obtained and used in the underwriting and pricing of their policies. We instruct our independent agents to give this notice to applicants on our behalf. We also advise our policyholders annually that we use insurance scores in our underwriting and pricing.

• If the use of credit information or an insurance score results in an “adverse action” we notify customers of such action in accordance with the Fair Credit Reporting Act (FCRA); and any applicable state laws or regulations. We provide customers with the information needed to obtain a free copy of the consumer’s credit report from the consumer-reporting agency that provided the credit history. We also advise customers of their right to dispute the accuracy or completeness of information contained in the credit report with the consumer reporting agency.

• Where the use of credit information or insurance score impacts the rating or underwriting of an existing policy, we notify policyholders in writing, and in plain language, of the primary characteristics of their credit history file that led to our decision.

No “Sole Basis” Underwriting Decisions

• Consumers will not be denied, cancelled or non-renewed solely on the basis of an insurance score. A decision to deny, cancel or non-renew based on an insurance score will not be made without consideration of other non-credit-related underwriting criteria. We do not consider a denial of insurance to have occurred if we have offered to write a customer in one of our affiliated companies.

Fair Treatment for Consumers with Limited or No Credit History (No Hit/No Score)

• We do not refuse to provide insurance solely due to a lack of a credit history file or a lack of sufficient information in a file to generate an insurance score – termed in the industry as “no hit/no score” status. Actuarial data strongly demonstrates, however, that as a group, such consumers present a greater risk of loss than those with relatively high (favorable) insurance scores. To allow for pricing that is fair to all customers, our pricing programs will account for this difference in risk in a manner consistent with our actuarial data and applicable law. Generally, this means that no hit/no score customers will not qualify for our lowest price program, but it also means that no hit/no score customers will not automatically be placed in our highest priced program either.

Use of Updated Credit Information

• The credit history files of some customers can change significantly over time. During the past several years, various states have imposed requirements on insurers with respect to such changes. How often an insurer must use an updated score and how it can use that updated score to impact a customer’s premium can vary significantly from state to state. Travelers complies with each of these individual state requirements. Additionally, upon request of a customer or agent, we will re-underwrite and re-rate a policy at the time of any annual renewal using updated credit history information.

Restricted Consideration of Certain Credit Factors

• We do not consider or use the following credit history related factors in developing an insurance score:

o Credit inquiries not initiated by the consumer

o Insurance-related inquiries

o Multiple-lender inquiries within a 30 day period (will be treated as a single inquiry)

o Collection accounts identified with a medical industry code on the credit file

o Disputed information that is identified on the credit file as under investigation by the credit-reporting agency.

Disclosure of Insurance Scoring Data and Models

• We will make available insurance scoring models and supporting data to regulators upon request.

Consumer and Agent Assistance

• We believe that agents and consumers should have access to a company representative who can assist with specific questions concerning a consumer’s insurance score and how it impacted our underwriting or pricing decision. We have implemented an Insurance Score Resource Center (ISRC) that will provide this service. The ISRC will work with agents and consumers where reconsideration of a pricing decision is requested due to extraordinary circumstances and will also help facilitate communication between customers and credit reporting agencies. The ISRC is available to all our customers and agents countrywide.

Extraordinary Circumstances

• We recognize that certain life events may have an adverse effect on a person’s insurance score.

When specific life events are demonstrated to have an adverse effect on an insurance score, we will make adjustments to lessen any negative impact the event may have had on an insurance score.

o Medical Collections

o Catastrophic injury or illness of the consumer or a dependent.

o Dissolution of marriage.

o Death of an immediate family member.

o Layoff or job loss of an insured.

o Designated Natural Catastrophe

o Military Duty

Consumer and Agent Education

• We will continue to make available consumer friendly educational materials that provide information on how insurance scores are derived, how they are used and the steps that can be taken to verify the accuracy of and correct any errors in credit history files.

• We will continue to provide agents and their staffs with education and training materials that will assist them in complying with the FCRA and other applicable laws, and that will enable them to provide answers to basic consumer questions about how we use credit information.

For more information, contact:

John Miletti, Travelers Government Affairs, 860-277-0459

Lynne Grinsell, Travelers Government Affairs, 860-277-5476

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download