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Committee advances bill limiting use of credit-based scores in auto insurance rates
Summary
House Bill 80 would prohibit insurers from using credit-based insurance scores, education or occupation when setting personal auto and recreational vehicle premiums; the committee gave the bill a due-pass recommendation amid debate over affordability and rate impacts.
House Bill 80, which would ban insurers from using consumer credit information, education and occupation when underwriting or rating personal auto and recreational-vehicle insurance in New Mexico, won a due-pass recommendation from the committee after contested testimony.
Sponsor Chair Thompson said the bill aims to reduce reliance on proprietary credit-based insurance scores that she and others say can have disparate effects on low-income drivers and communities. “I asked them, okay—how are we assured that you are not using gender or race or economic status as a basically to discriminate? And what they told me is that information is proprietary,” the sponsor told the committee, arguing that if models are opaque they should not determine access and price for a required public-facing product like auto insurance.
The Office of the Superintendent of Insurance and the state’s chief actuary supported the bill, citing concerns that credit-based scoring is correlated with income and can affect affordability. The superintendent’s representative said the office would review rate filings and ask questions about company models should the bill pass.
Industry groups and insurers testified in opposition, arguing that credit-based insurance scores are an objective, actuarially sound predictor of claims risk and that removing them will reduce rating accuracy and raise premiums for many consumers. Opponents warned of redistributional effects in which policyholders with strong credit scores would see premiums rise to subsidize higher-risk or poorer-credit populations.
Committee members asked for evidence of the bill’s effects from the two states that already restrict credit scoring; witnesses acknowledged limited comparative data. Sponsors framed the measure as a policy to increase insurance take-up among uninsured motorists and to reduce disparate impacts, while insurers warned of higher rates for certain demographics. The committee voted to recommend a due pass; the roll call was announced as 6–2 in favor.
