Dennis Tuuri

Full PEAPAC Analysis

PEAPAC Explanation: Insurance companies use a wide variety of factors to determine prices. One of these is credit score or history. This Measure would make it illegal for them to use credit data in its setting of rates or premiums.

PEAPAC Comment: We oppose this Measure on three grounds. First, it isn’t the State’s job to micro-manage private business. Second, this is particularly true when the business is, in essence, rewarding good behavior. Third, the sorts of technical questions raised in this Measure are best left to the Legislature to sort out.

First, the insurance industry, though increasingly regulated, needs the freedom to make statistical correlations and set prices based on such data. The Bible, in promoting private property, also commends the freedom to enter into business transactions relatively unhindered by the civil state. A marketplace free from unnecessary and unprofitable civil micro-management is to be desired. Measure 42 is a wrong-headed attempt to over-regulate insurance companies.

Second, one’s credit score usually reflects the decisions, good or bad, that one makes in life. The use of credit scores has the practical effect of rewarding those who have made good decisions. Measure 42 would take away a tool that presently rewards good decisions, likely resulting in higher premiums for good people.

Third, this is a complicated issue. While the ability to vote on state-wide ballot measures is a wonderful and needed tool for governance, it has its limits. What is the statistical basis for the use of credit scores in this way? Have people actually been damaged by this practice? What unintended consequences may come from the passage of this technical piece of legislation? The Legislature can take the time, hear expert testimony and sort through the complex issues raised by this Measure. Isn’t this what we pay them to do? We therefore urge a No vote on Measure 42.