Credit Q&A | Part 2
The second in our series on credit and related issues.
Agents periodically ask questions about credit and credit-related issues. Credit is a very complex part of our business process, and there is seldom any absolute answer as each case is unique. In this four-part series, we'll answer some commonly asked questions.
Q: If the account was a slow pay in the past, how long does the account have to show an improved pay pattern before SAIF will consider offering coverage?
A: Generally, SAIF will want to see at least two full years of sustained and satisfactory credit to consider offering voluntary coverage again if the pay history is the only information available to make our decision. Financial information, pay history within your agency, a deposit, or other information about the financial situation can also have an impact.
Q: Who can I talk to about a debt owed SAIF?
A: You may contact SAIF's collection department.
Q: Why is credit information used in the submission process?
A: A Dun and Bradstreet (D&B) commercial credit report is obtained because it offers a glimpse into a customer's payment habits with other creditors, and allows us to evaluate how that customer may pay SAIF.
Q: Is this new, or has it been around for a while?
A: Determining the creditworthiness of SAIF customers has always been an essential part of the underwriting process. We believe in fair-share pricing, which means that customers should not be asked to subsidize each other. A customer who pays their premium in full and on time should not have to pay more to make up for customers who do not.
Q: Do the review process and methods used vary from company to company?
A: We don't know exactly what review processes and methods may be used by other companies. Our employees who worked at other carriers prior to SAIF, and our agents, tell us that the process is similar. SAIF's credit review processes have been in place for nearly 30 years. When an analysis is requested, SAIF reviews and evaluates each customer's report in its entirety for consistency and fairness. The processes used to evaluate a customer's creditworthiness may be different, but the bottom line is that companies use credit information to determine if, and/or how, it expects to do business with its customers. The more information we have, the better the decision we can make.
Q: What credit reporting resource does SAIF use?
A: SAIF uses Dun and Bradstreet as its primary source for outside credit information. We have experimented with other forms of credit data, but D&B provides the most useful information. We are also very interested in any information that can be provided by our agent or customer. Knowing that the agent has a long-term relationship with the customer, that other lines of insurance are paid promptly, and that the customer has ready access to surety (which requires in-depth credit analysis), all help us make a decision. The less information we have, the more conservative we must be.