Washington State Insurance Commissioner Mike Kreidler is targeting Jan. 1, 2022, as the effective date for a permanent rule temporarily banning credit scores for insurance policies for three years.
“The insurance industry in Washington wants to hang on to an unjust, secretive and unrealistic method to determine what consumers pay to insure their vehicles and homes,” Kreidler said. “I will continue a well-supported effort to permanently ban credit scoring. Consumers deserve better. The multibillion-dollar industry needs to take action to rid itself of this unreliable practice.”
Authorities indicated a public hearing is slated for Nov. 23 regarding the proposed rule and noted Kreidler rejected a recent request from the American Property Casualty Insurance Association (APCIA) and the National Association of Mutual Insurance Companies to reconsider his stance.
To that end, the APCIA and National Association of Mutual Insurance Companies recently joined the Professional Insurance Agents of Washington, the Independent Agents and Brokers of Washington, and NW Insurance Council in issuing a statement on the matter.
“It is time to return to a normal insurance marketplace and end the chaos that Insurance Commissioner Kreidler’s emergency rule created, and that his proposed permanent rule will perpetuate,” the organizations noted. “A return to normal means returning to risk-based pricing for insurance, which includes the use of credit-based insurance scores.
Through the Office of the Insurance Commissioner’s emergency rule, now invalidated, we all had an opportunity to see what can happen to consumers when the use of risk-based factors like credit-based insurance scores are not permitted.”
The organizations maintain the proposed rule means higher premiums for low-risk policyholders purchasing auto insurance, homeowners insurance, renters insurance, and other personal lines of coverage.