A Federal Trade Commission

By James Tam on October 4th, 2007

Insurance companies such as Allstate Corp. and MetLife Inc. say credit histories strongly correlate with a tendency to file more insurance claims, arguing that the practice lowers rates for consumers with decent or better credit. A Federal Trade Commission study released in July found that credit scores are effective at predicting the amount of insurance claims. It also found that blacks and Hispanics tend to have lower scores, which leads to higher auto insurance premiums.The report “confirms some of our initial concerns about the fairness of credit-based insurance scoring when it comes to Latinos and African-Americans,” Rep. Luis Gutierrez, D.-Ill., said in a statement.

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