Washington State Insurance Commissioner Mike Kreidler has begun the process of adopting a regulation to implement the new law restricting insurers’ use of credit-based insurance scores. He hopes to adopt a final rule by Aug. 21.
National Association of Independent Insurers (NAII) local lobbyist Mel Sorensen raised certain concerns in testimony at a hearing on the proposed regulation recently. Among those concerns were:
• Insurers may not be able to identify from a credit report whether any given loan is for the purchase of a home or vehicle, as would be required by the proposed regulation as now drafted. Sorensen said it is unclear whether the vendors used by insurers are able to produce such clarification.
• A provision requiring insurers to tell a consumer about the four most significant factors leading to an adverse decision may be difficult because some credit reports do not exhibit four factors. He suggested the wording be changed to say insurers would have to report “up to four” factors.
• NAII got clarification from the commissioner’s office to the effect that a requirement to file a multivariate analysis would not apply when base rates are changed due to increasing loss costs or other factors and credit is not used. The NAII also expressed continued concern that the multivariate analysis requirements would impose a disproportionate burden on smaller companies as they try to compete in the marketplace.
NAII opposed enactment of the new law on the grounds it would deny most consumers the lower rates to which they would be entitled because of their favorable insurance scores.
Topics Legislation Washington
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