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Mike Kreidler has found his crusade
State Insurance Commissioner and mild-mannered former optometrist Mike Kreidler has never had the high-profile of his headline-grabbing predecessor, Deborah

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Mild-Mannered Insurance Commissioner Mike Kreidler Shows His Teeth Over Controversial "Credit Scoring"

kreidler.jpg
Mike Kreidler has found his crusade
State Insurance Commissioner and mild-mannered former optometrist Mike Kreidler has never had the high-profile of his headline-grabbing predecessor, Deborah Senn, who led a crusade against health insurers that charged too much and gave too little. Kreidler, working behind the scenes on the dry minutiae of rates and practices, made the job seem boring again.

But he has a backbone that can surprise you, and it's currently in full evidence. Kreidler is calling for a ban on insurance companies' use of credit information to set their rates. He labels the increasingly controversial practice "discriminatory and blatantly unfair." A Legislative hearing on the bill he has proposed is scheduled for 6 p.m. tonight.

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The problem with so-called "credit scoring," according to Kreidler, is that it uses arbitrary and sometimes downright bizarre criteria. Someone could be penalized, for instance, for buying a couch at Macy's and taking advantage of on an option to pay six months later with no interest. Cancelling or consolidating credit cards can also result in a lower score, according to his office.

"What do any of these practices have to do with how these people drive their cars or how they treat their homes?" he asks.

A lot, insists the insurance industry. "What's important to remember is that consistently, across the board, people with lower credit ratings tend to file more claims," says Darrin Sanger, a spokesperson for the Northwest Insurance Council, a Seattle-based trade group. The industry argues that if it can't use that information to predict its losses, rates will go up for the vast majority of people.

Such threats scared Oregon voters from passing a credit scoring ban in a 2006 ballot measure, and prompted this state's Legislature to say no to a ban the first time Kreidler raised the issue shortly after taking office in 2002. (That same year, Maryland passed a ban in regard to homeowners insurance, and the industry claims rates have gone up as a consequence. See pdf of industry claims here.)

Kreidler is pointing to the economy as a reason to reopen the issue, saying more people now have lower credit scores and are consequently being hurt by this practice. Recession politics might make legislators more receptive to his call.

But his spokesperson, Sandi Peck, concedes that it's likely that the insurance industry will fight this tooth and nail, starting with sending a horde of lobbyists tonight and possibly taking out media ads later. Looks like Kreidler, at least, has a good-old populist battle on his hands.

 
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