Florida Moves Closer to Implementing Restrictive Credit Scoring Rule

On January 31, 2006, the Florida Financial Services Commission (FSC)¹ voted to adopt an administrative rule which, if implemented, would require insurers to demonstrate by an extraordinary level of proof that the use of credit scores in underwriting personal lines of auto and residential property insurance would not result in unfairly discriminatory rates.² The proposed rule would define the term "unfairly discriminatory" to prohibit the use of any credit scoring methodology which "disproportionately affects" persons based on their race, color, religion, marital status, age, gender, income, national origin, or place of residence. Although the FSC has voted to adopt the proposed rule, under Florida law it cannot be filed for final adoption until a pending rule challenge filed by a number of insurance trade groups has been resolved.³ If the rule challenge fails and the proposed credit scoring rule is implemented, the use of credit scoring as a factor considered in auto and residential