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CREDIT INSURANCE ANALYSIS POINTS TO NEED FOR STABLE REGULATORY ENVIRONMENT
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Contact: William F. Burfeind
Executive Vice President
(312) 939-2242
Chicago, October 16, 2007 – A new analysis of credit insurance that takes a cautiously stable view of the industry points to the need for a stable regulatory environment in which credit insurers can continue to provide long-valued service to consumers in a changing debt protection marketplace, the Consumer Credit Industry Association (CCIA) said today.
“The special report by respected A.M. Best Research issued Oct. 8, 2007 foresees further consolidation in the credit insurance industry, identifies a number of challenges and anticipates the market emerging as a group of stronger more diversified carriers,” said CCIA Executive Vice President William F. Burfeind.
He observed however that the report correctly discussed recent changes and trends in state and federal regulation of the financial and credit industries that have tended to lessen availability of credit insurance.
“These trends have impacted the availability of credit insurance but not its fundamental utility to consumers when they borrow and want to protect their loans by insuring repayment in the event of death, disability, involuntary unemployment or loss of property purchased with the proceeds of a loan,” said Burfeind.
He added, “These conditions underscore the need for a stable regulatory environment that provides adequate premium rates and concentrates on uniform and simplified administration in licensing, forms approval and review and approval of innovative products -- conditions that the CCIA and its member companies advocate in all states.”
The A.M. Best report noted that credit insurance industry success depends on dedication to remaining in a very competitive market and pursuing market share increases. It noted some further consolidation from 179 carriers writing credit insurance in 2002 to 149 carriers at the close of 2006.
“These changes reflect the competitive credit industry market,” said Burfeind, noting, “Today consumers have several options when they want to protect repayment of loans including debt cancellation products as well as credit insurance.”
Burfeind said, “Assuring a level regulatory field to preserve credit insurance options is in the interest of consumers who are best served by having an array of debt protection product choices including credit insurance, debt cancellation contracts and other variations offered by the credit industry.”
Based in Chicago, the 120-member CCIA is a trade association of insurance companies and other financial service providers selling or servicing consumer credit insurance, credit related lines of insurance, and other consumer credit protection products including debt cancellation and suspension contracts or agreements.###
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