The Center for Economic Justice, a consumer group, wants life insurers to put a new column of information about their credit life operations in their annual market conduct reports.
Life insurers use the Market Conduct Annual Statement template to show regulators how they handle claims, complaints and other matters.
Consumers typically buy credit life insurance from mortgage lenders, credit card issuers and other lenders.
Some members of the Market Analysis Procedures Working Group, part of the National Association Insurance Commissioners, want to cut credit life out of market conduct reporting for ordinary life insurance, because they believe credit life insurance is different from ordinary life insurance.
The Center for Economic Justice, one of the groups that speaks for consumers in NAIC proceedings, says it thinks that separating credit life from ordinary life in the annual market conduct statement makes sense. The center says, however, that the statement should provide more information about credit life operations, not less.
"Credit life is sold in a reverse-competitive market in which consumers have far less market power than in traditional life insurance markets," the group says in a comment sent to the working group.
In January, the Consumer Financial Protection Bureau found that a bank collected at least $3.75 million in credit insurance premiums from borrowers whose credit insurance should have been canceled, the center says.
The bank also canceled the credit insurance of some borrowers prematurely, and 25 of those borrowers ended up facing credit insurance claim denials, the center says.
One solution would be for credit life insurers to report the same kind of experience data that issuers of ordinary life report, to help regulators spot problems, the center says.
The working group has posted the comment on its section of the NAIC's website.
