Groups that represent both industry and consumers are raising concern over proposed changes by the province to disallow insurance companies from asking for their clients’ credit scores.
Both the Consumers’ Association of Canada, an advocacy organization dedicated to defending consumers’ rights, and TransUnion, one of Canada’s largest credit information companies, have registered public concern over this proposed change.
Bruce Cran of the Consumers’ Association said he does not understand why government is getting involved in this issue.
“Over 75 per cent of people have good credit records,” he said.
Since most insurance companies offer discounts on home and auto insurance to those with good credit, eliminating this practice would also eliminate these discounts.
“That means 75 per cent of people can benefit (from discounts). The other 25 per cent could too if they get their act together,” Cran said.
In late November, P.E.I. Justice Minister Janice Sherry said government had received complaints that the practice of collecting credit scores had resulted in some Islanders being denied insurance or offered only highly-priced rates.
She announced she would seek public input on a possible change to the regulations that would disallow the use of personal financial information by insurance companies.
“As the minister responsible, my concern would be around those who would be affected negatively in the fact that they may not be able to access insurance,” Sherry said in an interview.
“I don’t think it’s something that people should be discriminated against due to their credit score.”
“Our insurance customers have told us that these discounts can range as high as 20 per cent,” - Ken Porter, president of TransUnion Canada
Ken Porter, president of TransUnion Canada, said he is concerned the proposed changes take away the right of consumers to voluntarily provide this information as a way to access lower insurance premiums.
“Our insurance customers have told us that these discounts can range as high as 20 per cent,” Porter said in an email response to The Guardian.
“Our data shows that most Prince Edward Islanders maintain what the industry defines as a good credit score, meaning a majority of Islanders would benefit from a flexible regulatory framework that allows them the choice to provide their credit information when applying for or renewing their home or auto insurance.”
Representatives from TransUnion were in Charlottetown this week and met with Sherry, as well as officials in the Opposition office.
Sherry said her department will take all feedback on this issue into consideration as they decide how to proceed.
“I’m sure that it will become pretty apparent (what to do) with the types of feedback and the information that the general public brings forward,” Sherry said.
“We’ll see, I think, trends in the communication that we receive back.”
The deadline for submissions to the department on this issue has passed, but Sherry noted she would be willing to accept additional feedback over the next week.