Since January of last year, Insurance Commissioner Matt Denn and I have been working to try to get this legislation passed through the General Assembly.

Our preference is for the original legislation, but we also think it is absolutely critical to start restricting the practice of credit scoring.

For Delawareans who already have insurance (almost 90 percent of all the drivers and homeowners in the state), insurance premiums will never be allowed to go up if a credit score worsens.

There will be no more stories about people who had temporary financial setbacks -- or errors on their credit reports -- and suddenly saw their insurance premiums skyrocket as a result.

Each current policyholder of a company that still uses credit scores for new policies in any way will have the right to have his credit score recalculated once a year.

If his credit score has improved, his insurance premiums will reflect that improvement. But if his credit score has gotten worse, his insurance premiums will not worsen as a result.

All of Delaware's current restrictions on the use of credit will remain in place. Among these restrictions are prohibitions on the use of bad credit resulting from medical bills for purposes of calculating a credit score, prohibitions on the use of dated credit information for purposes of calculating a credit score, and prohibitions on punishment of policyholders who have "thin credit" or "no credit."

Currently, people whose credit suffers because of a job loss, or because of a divorce, or because of a flood that damages their home, or just because they paid a bill late, also see substantial increases in their insurance premiums at a time when they can least afford it.

There are only three states in America that are currently enforcing bans on the use of credit in either auto or homeowners insurance (and a fourth that intends to but is currently involved in litigation over its proposal).

By contrast, 18 different state legislatures across America considered credit scoring bans in the last year, and not one of those bills was successful.

The restrictions on credit scoring in the revised bill I have agreed to are tough but fair, and would leave Delaware behind only the three or four states that have outright bans.

A News Journal editorial suggested that insurance companies might try to "dump" existing policyholders, in order to get around the new credit scoring law1s protections for existing policyholders.

That is illegal, and if the Delaware Insurance Department finds out that any company is attempting to do that, the strongest possible fines and sanctions will be imposed on that insurance company.

The new bill to restrict credit scoring is not perfect, and Commissioner Matt Denn and I would prohibit credit scoring in every instance with respect to insurance if we could.

But after more than a year of work and lacking the votes to get the original bill passed, I believe that the revised bill, by making Delaware a national leader in limiting the unwarranted use of credit scores for insurance, is a very good first step.

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