The Michigan Supreme Court will hear oral argument on Wednesday morning in a case challenging state rules that forbid insurance companies from using credit scores to determine the amount of a customer’s homeowner and car insurance premiums.
In 2005, the Michigan Office of Financial and Insurance Regulation passed new rules preventing insurance companies from using a customer’s credit scores in determining risk. Several companies then challenged those rules in state court, where Judge James Fisher declared those rules invalid and issued an injunction against their enforcement.
The OFIR appealed that ruling and the appeals court in August, 2008 issued a split decision with three written opinions from the three judge panel. Both sides are now appealing that ruling to the Michigan Supreme Court. In a press release on Tuesday, OFIR Commissioner Ken Ross said:
“Michigan drivers have waited long enough for relief on this issue. Rather than placing such heavy reliance on surrogate underwriting schemes like insurance credit scoring, Michigan insurers need to get back to basics, basing premiums on relevant information such as driving record, experience, and miles—not whether a driver paid their phone bill late.”
Michigan Government Television will air the hearing live at 9:30 am on Wednesday.