As seen at the Pacific Business News:
State Farm Insurance is setting aside $1.2 million to settle a lawsuit over credit scores that lawyers contend were improperly used to set rates for Hawaii customers.[...]
According to the lawsuit filed Sept. 14, 2001, State Farm improperly used credit scores to set insurance rates, which violates Hawaii law. “Hawaii law is absolutely clear — an insurance company cannot set rates for auto insurance using credit scores,” said Jeff Crabtree, who also represented class members.
That’s not particularly helpful news during the voting on Oregon Measure 42, is it?
Seriously, $1.2m is a relatively small amount of money compared to State Farm’s book of business. If State Farm did violate Hawai’i’s absolute ban on scoring, they need to fix the error. And, as I’ve written previously, more could be done to improve insurers’ use of scoring without throwing the baby out with the bath water.
However, this smells more like State Farm just paying the blackmail to make the suit go away, rather than run up more expensive legal bills defending the suit.