CAS Exam 6C Fall 2017, Question 3
Study guide: Exam 6C
A British Columbia property and casualty insurance company is considering reviewing its factors for the credit-based insurance scores for homeowners insurance. The company believes that recent improvements in economic conditions reduce the need to segregate by credit-based insurance scores because "most policyholders are now in a good economic situation". The company plans to review the consent to use credit information for rating that it has obtained from all policyholders.
Part a (1 point)
Fully discuss the appropriateness of using credit-based insurance scores for risk differentiation.
Part b (1 point)
Fully discuss the need to review the credit score consent forms for all policyholders, citing an outcome from a landmark decision.
Part c (0.5 points)
Discuss the need to review credit-based insurance scores after a change in economic conditions.
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