Court: Insurance rates can reflect credit scores

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Insurance companies can use a person's credit report to determine rates, the Michigan Supreme Court said Thursday in declaring that state regulators exceeded their authority when they banned the practice as discriminatory.

The decision ends a legal battle between insurance companies and Gov. Jennifer Granholm's administration that has reached three courts since 2005.

The industry says people with strong credit reports make fewer claims and deserve lower rates than people with weak credit reports. The Supreme Court, in a 4-3 ruling, said Michigan law allows companies to offer people with good credit lower rates.

"It is difficult to see how offering discounts to some insureds on the basis of good insurance scores is inconsistent with the (law's) general purpose of availability and affordability of insurance for all consumers," Justice Maura Corrigan wrote in the majority opinion.

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