Oregon Ballot Measure 42, Use of Credit Score to Determine Insurance Premiums (2006)

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Oregon Ballot Measure 42 was on the November 7, 2006 ballot in Oregon as an initiated state statute. It was defeated.

Election results

Measure 42
Defeatedd No876,07564.6%
Yes 479,935 35.4%
Election results from Oregon Blue Book website, accessed December 13, 2013

Text of measure

Ballot title

The official ballot title for Measure 42 was:

Prohibits Insurance Companies from Using Credit Score or “Credit Worthiness” in Calculating Rates or Premiums[1][2]


The official ballot summary was:

Current state law requires certain disclosures before a consumer's credit history may be obtained by an insurance company or agent and provides certain restrictions on the use of a consumer's credit history in determining insurance rates. This measure prohibits insurance companies and agents that sell or market medical, health, accident, automobile, fire, or liability insurance, or any combination of policies providing such coverage to consumers from quoting, offering, or charging, directly or indirectly, rates or premiums based solely or in part upon the credit score or "credit worthiness" of an insured or an applicant for insurance. This measure does not apply to policies already in effect, but it shall apply to all policies commenced, changed, amended, or renewed after the measure's effective date. Other provisions.[3][2]

Financial impact

The official estimated financial impact statement was:

There is no financial effect on state or local government expenditures or revenues.[3][2]

Full text

The full text of the legislation proposed by Measure 42 was:

The Oregon Revised Statutes are amended by adding the following section, which section shall read:

Section 1. No insurance company, or agent acting on the part of an insurance company, which sells or markets medical, health, accident, automobile, fire, or liability insurance, or any combination of policies providing such coverage to consumers, shall quote, offer, or charge, either directly or indirectly, a rate or premium which is based solely or in part upon the credit score or credit worthiness of the insured or applicant for insurance.

This 2006 Act shall not affect policies in force at the time it is enacted, but shall affect policies which are commenced, changed, amended, or renewed after the effective date hereof.[4][2]


In 2008, Oregon's Insurance Division discovered that Farmers Insurance was illegally using credit scores to set auto and home insurance premiums as they were renewed. The division fined the insurance company $10,000 for breaking the law. According to Farmers Insurance Company, it was a computer programming error.[5][6]



Bill Sizemore and Grace I. Sizemore supported Measure 42

Consumers Union, which was behind Consumer Reports magazine publicly supported the measure as well. Spokesperson Norma Garcia said the initiative "will go a long way to protect insurance consumers in Oregon."


Donors to the campaign for the measure:[7]

  • Total: $5,116,990
  • Overall Total: $5,116,990



Property Casualty Insurers Association of America (PCI) and other insurance industry representatives came out against the measure, saying that consumers would end up paying higher prices for insurance if they were prohibited from calculating rates based on credit scores.

"Today, 60 to 70 percent of Oregonians pay lower insurance premiums because companies use credit scores to help calculate their rates," PCI said. "If Sizemore's measure passes, Oregonians with good credit history would subsidize individuals with bad credit. Consumers may be forced to pay significantly more for their auto or homeowners insurance."

Oregonians Against Insurance Rate Increases also voiced their opposition, citing the same problems as PCI did about the measure.

See also

External links

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