Actuarial Notes

CAS Exam 6C Fall 2013, Question 10

Study guide: Exam 6C

Florida Insurance Commissioner, Kevin McCarty, questioned the social validity of using credit-based insurance scoring on the basis that it is unfairly discriminatory.

Part a (0.5 points)

Identify two historical examples that support his conclusions.

Part b (0.75 points)

Identify three segments of society that are impacted by unfair discrimination in credit-based risk rating.

Part c (0.75 points)

Assuming that the use of credit-based insurance scoring gains regulatory approval, briefly describe three potential problems with using credit-based data.

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Concepts tested

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