A former Higgs government cabinet minister on Friday questioned auto insurance companies using a person's credit score when calculating premiums.

Progressive Conservative MLA Dorothy Shephard says she's "offended" insurance companies can use the information. 

"It would put a ton of people at a disadvantage," Shephard said at a legislative committee meeting Friday. Shephard called it an overreach.

"I think that, quite frankly, government should do something about it."

Michèle Pelletier, the New Brunswick consumer advocate for insurance was answering questions from MLAs at the committee meeting, and agreed.

   PC MLA Dorothy Shephard says she's 'offended' insurance companies can use the information. (Shane Magee/CBC)

Pelletier said companies are using the score to offer discounts to drivers on their policies. It's a practice Pelletier has repeatedly argued against at the New Brunswick Insurance Board, which regulates auto insurance rates. 

Pelletier noted several provinces, including Ontario, restrict the practice. In New Brunswick, the issue has been debated for more than a decade. 

Legislation passed by the former Shawn Graham Liberal government to ban its use wasn't implemented because supporting regulations weren't implemented. Successive governments have eyed the issue without acting.

Pelletier previously said that, despite the lack of a formal ban, insurers for about a decade avoided using credit scores.

"There was kind of an understanding they would not use it, but they have asked and, since it was not prohibited, the New Brunswick Insurance Board is permitting it,"Pelletier said in 2021.

Pelletier told MLAs Friday that she would welcome a move to add credit scores to the list of factors such as age and marital status that insurance companies can't consider. 

"So I would be more than happy if that would be put in."

CBC News has requested comment from the province about the committee discussion. 

The issue has arisen in a series of insurance board rulings in recent years where insurance companies have argued a person's credit score can predict whether they may make a claim in the future.

The board issued a decision last fall that ruled on a request by Echelon Insurance to offer discounts ranging from five to 25 per cent, depending on a person's score. The company said more than 92 per cent of its Quebec policyholders had consented to the information being used.

Pelletier, the board noted, had argued it shouldn't be allowed because it could negatively impact those who can least afford insurance. Echelon argued it should be allowed because it's a factor used by other companies.

The board approved its use.

'Reasonable' factor, board has ruled

"Faced with evidence of a reasonably strong correlation, the Panel accepts that the use of this variable leads to rates that are reasonable insofar as they align as well as possible with the best estimate of expected loss cost for the coming policy period," the board's decision states. 

"In the absence of a legislative prohibition, this is a reasonable rating variable."

In another decision released in December, the board allowed Aviva General Insurance to use a person's credit score, if the customer consents. 

"The voluntary adoption of credit score as a rating variable in New Brunswick has been increasing in the last several years by most insurers," the Aviva decision states. "The Panel accepts that there is an apparent correlation between credit score and auto insurance risk and, in the absence of statutory prohibition, it can be a reasonable and appropriate rating variable."

The decision says the board would continue to review the requests for use of credit scores on a case-by-case basis "to ensure that policyholders are protected against unfair rating practices."