McCarty.Credit

Representing the NAIC, McCarty presented his views on the impact of credit-based insurance scoring on the availability and affordability of insurance. This reading is closely related to Kucera.Credit.

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Based on past exams, the main things you need to know (in rough order of importance) are:

• arguments against use of credit scores (see Kucera.Credit for arguments for use of credit scores)
• disproportionate impact of credit scoring on certain classes of insureds

reference	part (a)	part (b)	part (c)	part (d)	part (e)	(part f)
E (2017.Fall #1)	see Kucera.Credit	arguments against - credit scores	see Kucera.Credit
E (2016.Spring #1)	disparate impact: -gender	credit score vs frequency - explain
E (2015.Fall #1)	how are age groups impacted	other groups being impacted	how can a metric drive loss diff
E (2014.Fall #2)	Kucera-cost based cond	when is ins equitable	ex-is it equitable	Bloom's Taxonomy: - financial stability	see NAIC.IRIS	Bloom's Taxonomy: - proxy variables
E (2014.Spring #5)	see Kucera.Credit	arguments against - credit scores	see Kucera.Credit

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In Plain English!

This paper is easy to read. If you have time, glance it over as you are only responsible for the first 11 pages.

Basically, McCarthy is concerned that use of credit-based insurance scores disparately impacts certain classes of people thus has a discriminatory effect. He argues that even if a tool may show mathematical correlations with insurance claims, this does not necessarily make it fair and a valid criterion for insurance purposes.

• list 4 cons with memory trick

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BattleCodes

Memorize:

Conceptual:

Calculational: