Washington Commissioner: Deadline for Insurers to Comply Credit Scoring Rule is May 6

Washington Insurance Commissioner Mike Kreidler is reminding insurance companies of the May 6 deadline to file rating plans that comply with his emergency rule to temporarily prohibit the use of consumers’ credit scores.

A Thurston County Superior Court judge on April 23 allowed Kreidler’s emergency rule to remain in effect by denying an insurance industry request for a preliminary injunction. Judge Mary Sue Wilson found that industry associations challenging the rule were unlikely to succeed with their two main arguments that Kreidler lacked “good cause” and had no authority to issue the rule.

Kreidler issued the emergency rule on March 23. Then the Independent Insurance Agents and Brokers of Washington, the Professional Insurance Agents of Washington and the American Property Casualty Insurance Association joined together in a lawsuit to halt Kreidler’s ban.

The temporary ban on the use of credit scores for insurance takes effect June 20. To comply, insurers must file rating plans by May 6 for review and approval by Kreidler’s office. To date, roughly 20 insurance companies have filed the required documentation, according to Kreidler.

“It’s time for the insurance industry to step up and meet its obligation to policyholders,” Kreidler said. “The financial impacts of the pandemic on individuals and families have only exacerbated the unfairness of the use of credit scores. The industry in Washington should rely on fair factors to determine what they charge for policies. For far too long the industry has subsidized more well-off customers at the expense of those with lower incomes.”

Kreidler has been working to eliminate credit scores from insurer consideration for some time. His most recent effort failed when a bill he backed, Senate Bill 5010, was gutted by an insurance industry amendment in the Senate Business, Financial Services & Trade Committee on Feb. 15.

Kreidler’s office estimates 200 companies are licensed to sell policies for auto, homeowner and renters insurance in Washington.

Related:

• Insurer Group Sues to Stop Washington Insurance Commissioner’s Credit Scoring Ban
• Washington Bill to Ban Insurers from Using Credit Scores Heads to Senate
• Credit Scoring Battle Brewing Between Washington Commissioner and Insurer Groups

Topics Carriers Washington