POWER TO AGENTS

A collection of articles from Dean Auten, owner of Auten Insurance Services of Brunswick, GA, former Georgia Legislator, Legislative Liaison of Georgia Insurance Agents Alliance, recipient of Insurance Expo 2003 "VIP" (Valuable Insurance Person) Award and a great American!

What Rights?

Call "800 WHO CARES

Hang In There!

What Independent Agents need to be successful

Don't Pee on Me and Tell Me It's Raining!

Commission Reductions

Cream of the Crap

Cry Babies?

Is Ignoring the Law Fraud?

Tough times never last. Tough people do

Why Be A GIAA Member?

Unite In Strength

NAAA Introduces Model Contract

Why I am against Credit Scoring

As many of you know, I am against Credit Scoring. To start I believe there will be many legal challenges to Credit Scoring and HB215 as passed.

Because of credit scoring, Companies will be criticized even more in the future and, unfortunately; Agents will be painted with the same brush. By "even more", Companies are now being criticized but not any where near to future if they continue using credit scoring as they do today. In addition, it does not matter if an agent does not represent any companies that use credit scoring, all agents will still get painted negatively. Criticism of Insurance Companies and/or criticism of agents end up hurting all of us in the business.

Here are the changes I would have preferred to see in HB 215:

1. To not allow companies to apply to renewals.

2. No Black Box. Companies must open up their scoring to agents and insureds (not just Commissioner of DOI)

3. Companies must be willing to discuss "why" their credit score adversely affects them and how they can improve their credit score.

For members that represent Progressive, they know that Progressive has agreed to all the points I have listed and that their new programs has included. I would like to see legislation require of all companies.

Comments on HB215:

1. 33-24-91. Legislation says they can't use "solely". That is currently requirement for using credit scoring in Georgia. Has it stopped companies from using credit scoring "solely"? No!! It has not!!

2. 33-24-91. "Recalculate every 12 months?" Without a provision to stop companies from using on renewals, this only gives companies a reason to up rate. Does anyone believe they would lower an insured to a lower premium company? Remember, if they refused to insure, they will not be asking for
updated credit score for a person they do not insure. DOI does not currently allow "tiers". Companies, like Progressive, are using several companies. If Progressive wanted to give an insured a Progressive company with a lower rate, it would require they cancel the current policy and get a rewrite. In addition, HB1268, Georgia's Non-cancellation bill, does not allow a company to non-renew for credit.

Will this legislation change that provision? I would rather legislation not require updated credit scores--it can't help Agents and will help a very, very small few insureds. The "very, very, small number of insureds that will be changed to lower rates will be because some agent ask for a reconsideration.

3. 33-24-92. Can't use properly disputed items. How are we (agents) going to know "what" is in dispute? I had one where Company told Insured and us that they could not give "specifics" as there were over 200 factors that created the poor credit score.

4. 33-24-93. Eddie brings up a good question, "what is an application?” When a person calls us, we give a quote. If we think insured may benefit from a company using credit scoring, we ask permission to get credit score and go back for another rate. At no time have we done an "application". It is still a "quote" until we get a signature and money.

5. 33-24-93. Companies can bind by phone but we cannot. I hope we can one day change that procedure that is used to help companies "direct" business at the expense of their independent agent's business. Regardless, I do not think an "application" (see #4) has been completed until all questions have been answered. Even the "directs" use a system of getting "only necessary information to quote" information until they have an order.

6. 33-24-96. Hold us harmless. Thanks. I think we need this provision as I am convinced there will be legal challenges.

As I sit here on my computer and realize the improved technology of the last 10 years, I want to be co-operative to positive improvements. I do not consider "credit scoring" a positive improvement simply because technology has given companies "immediate" information that used to take days/weeks.

At our NAAA Columbus meeting we learned that in a matter of minutes, companies could secure: 1. Credit score 2. Motor vehicle reports 3. CLUE report 4. I forget name but it is a report that tells companies about "other residents" in same household.

All this can be good but, of all of the reports, Credit Scoring is the most controversial and, possibly, legally challenged. I have no problem with Company getting negative credit information and getting it "immediately".

My problem is not with credit reports but credit scoring.

That's my opinion. Dean

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