Feb. 24, 2010
FREDERICTON (CNB) - The provincial government has introduced an amendment to the Insurance Act that will increase its ability to prohibit underwriting and rating practices to all classes of insurance beyond automobile insurance.
Regulations will prohibit using credit scoring for underwriting and rating of property and casualty insurance, including automobile insurance.
New Brunswick will become the first province to introduce such prohibitions. Alberta and Ontario prohibit the use of credit scores, but only for automobile insurance.
"Consumers and regulators are concerned about the increased use of credit scores for underwriting and rating," said Kelly Lamrock, minister of justice and consumer affairs as well as attorney general.
"It is patently unfair for persons who may have missed a payment on a loan at some point in their lives to have that reflected on their insurance premiums. Further, there are many circumstances that have little or nothing to do with a person's ability to manage his or her finances - including identity theft, sudden family or medical crises, sudden unemployment or other catastrophic events."
The provincial government is making these changes to ensure fairness and access to insurance for all consumers.
"As a government we understand that getting affordable insurance can already be challenging enough in some circumstances," said Lamrock. "We are pleased to bring forward changes to the Insurance Act to provide even greater protection for consumers."
The Office of the Consumer Advocate and the Insurance Brokers Association of New Brunswick have called for an end to using credit scoring in underwriting and rating.
MEDIA CONTACT: Marc Belliveau, communications, Department of Justice and Consumer Affairs, 506-453-4138.