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

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

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A measure intended to help consumers by banning the use of credit history by auto insurance companies passed the House of Delegates on Friday, but not before being significantly amended in committee.

As originally written, House Bill 436 would have barred insurers from considering a motorist’s credit score when setting their premiums. Current law already prohibits companies from using credit histories when deciding whether to offer coverage to an individual driver.

The measure, sponsored by Del. Melissa Wells (D-Baltimore), seeks to protect people with below-average credit scores from having to pay more to insure their vehicles. Advocates say such policies punish those at the lower end of the socioeconomic spectrum.

But the insurance industry strongly defends the use of credit scores, saying they are an accurate predictor of whether an individual is likely to file a claim. Industry representatives also contend 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 be factored into rates, they insist.

The House Finance Committee amended the Wells bill Thursday, removing the ban and adding language that would allow businesses to lower rates if a consumer has suffered a “catastrophic event,” illness, death in the family, job loss or another factor.

Motorists’ requests to insurance companies must be 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 passed 13-7, with Democrats voting for the measure and Republicans opposing it.

“It’s definitely not what I wanted to see happen with the bill,” Wells said after the committee vote. “There was nothing in the books before that anyone could use. So this will at least give a respite (from high premiums), but there is much more to be done.”

The 93-40 vote on the House floor also split heavily along party lines.

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

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