But there’s gonna be a meter on your bed
That will disclose
What everybody knows
— Leonard Cohen
How does it feel to be a boiled frog?
You’ve probably heard the old canard that a frog dropped into boiling water will jump out but if you place him in a cold pot and slowly raise the temperature, he cooks to death.
Actually, frogs are smarter than that. They bolt when it gets too hot.
People are not as smart.
Did you know that because of the 1945 McCarran-Ferguson Act, courtesy of Nevada’s Sen. Pat McCarran, insurance companies can conspire to fix prices?
Did you know that since 1970, any outfit with which you do business can run a credit check on you without your permission? The Fair (?) Credit Reporting Act has some seriously anti-consumer provisions.
Insurance companies are getting increasingly bold about using unauthorized credit searches to jack up auto, home and health insurance. Local agents have been getting complaints.
Several state insurance commissioners are reviewing evidence that using credit scores creates red-lining, which is illegal, but what the hell. We live under Wall Street ethical norms set by Ronald Reagan, Edwin Meese, Karl Rove, Richard Cheney and Bush the Lesser: Anything goes, just don’t get caught.
I called the Nevada Division of Insurance and asked if the race and ethnic makeup of insurance ratepayers roughly mirrors the population. Insurance companies insist that they can’t make decisions based on race or ethnicity and thus are barred from gathering such information.
“We are confident that no one is being discriminated against through credit scoring,” NDOI spokesman Jake Sunderland told me. But Nevada insurers may set rates by neighborhood, which looks like thinly disguised red-lining.
“Insurers have no legal obligation to disclose their scores and few do. Progressive and Farmers give customers details about their score on request and ChoicePoint sells insurance scores to a consumer for about $13, but won’t reveal which insurers might use them,” Consumer Reports noted in 2010. “Consumers are largely left to protect themselves. Most states allow the use of scoring and insurance lobbyists have successfully repelled numerous efforts to ban or restrict it. Twenty-two states have passed model legislation endorsed by the insurance industry, which provides only weak consumer protections. Chiefly, the laws prohibit scoring models from counting delinquent medical accounts.”
Nevada passed a flimsy measure in 2011, Assembly Bill 74, which puts the burden on ratepayers to apply.
“There are no standards...Maryland, New Mexico, Oregon and Washington have added stronger restrictions, while California, Hawaii and Massachusetts ban scoring for all insurance. Maryland has banned it for homeowners policies,” Consumer Reports stated.
I have requested copies of credit scoring models submitted to the NDOI. State lawyers will decide if I can obtain data under the Nevada Public Records Law, long among the weakest in the nation. If they refuse, I have to sue. Insurance companies have a little more money to pay lawyers than I do.
“Several studies have shown that insurance scoring adversely affects blacks, Hispanics and low-income consumers. Despite such problems, most states allow insurance scoring and efforts to limit or ban it have been met with aggressive lobbying by insurers,” Consumer Reports stated.
Their full study, as well as a bunch of other frog-boiling revelations will be linked to the expanded web edition of this column at NevadaLabor.com.
Mr. Sunderland vigorously defends his department as advocates for consumers, as well he should. However, NDOI has received no complaints about credit-based ratemaking, probably because ratepayers are in the dark.
Other states have insurance consumer advocates separate from regulators like NDOI which must balance the interests of stockholders against ratepayers. The Nevada Public Utilities Commission used to have the same conflict of interest. Even today, PUC staff almost always makes recommendations for higher power rates than does the consumer advocate.
People need to start filing complaints when they are notified of auto, home or health insurance rate increases based on credit scores.
An insurance consumer advocate’s office must be established by the 2013 legislature.
Clinging to the ledge
State Sen. Greg Brower, R-Reno, should get flowers from his erstwhile colleague Sheila Leslie, who resigned her safe Democratic seat to run against him. On the same day that Leslie’s announcement wallpapered the media, a Brower mailer hit every house. Any voters unclear about their newly-reapportioned districts immediately knew if they were in the middle of the Brower-Leslie fight for control of the upper house.
Tuesday is a good day for civil rights. In the ayem, Dr. Stephen Tuck of Oxford University will speak on “The Doubts of their Fathers: Secularization, Jim Crow and the Early Civil Rights Movement,” 10:00-11:30 at the new UNR student union. It’s free. Info: 775-784-6455. Tuesday evening, the Reno-Sparks NAACP is sponsoring a contingent to the Reno Bighorns vs. Idaho Stampede basketball game. Any $8.00 general admission ticket purchased through NAACP members generates $3.00 for the organization. Current New York Knicks sensation Jeremy Lin played for the Bighorns last season, so you never know what future superstar you might see from the local cheap seats. For tickets, call Don Gallimore at775-746-9453.
Be well. Raise hell.
Andrew Barbano is a 43-year Nevadan, first vice-president of the Reno-Sparks NAACP, editor of NevadaLabor.com and JoeNeal.org. Barbwire by Barbano has originated in the Tribune since 1988. E-mail firstname.lastname@example.org.