Washington Insurance Commissioner Mike Kreidler shared a draft rule that requires all property/casualty insurers selling personal lines of insurance to give policyholders a simple breakdown of the reasons behind any future premium change.
According to a press release from Kreidler, consumers often contact his office when they receive a premium increase and they haven’t been given a clear explanation for the increase.
In many cases, their insurer told them the inability to use credit scoring was driving up their premium, according to the release.
Kreidler has been in a battle with insurers over his new rule banning credit scoring. A judge in Washington in April signed an order formally staying the Kreidler’s ban on using credit ratings to help set insurance premiums on vehicle, rental and homeowners insurance.
In February, the American Property Casualty Insurance Association, along with co-petitioners the Professional Insurance Agents of Washington, and the Independent Insurance Agents and Brokers of Washington, filed a petition in Thurston County Superior Court challenging Kreidler’s permanent rule banning the use of credit-based insurance scoring. The National Association of Mutual Insurance Companies separately filed its own petition, and the court consolidated the cases at the joint request of APCIA, PIA, IIABW and NAMIC.
Mark Sektnan, APCIA vice president of state government relations, said Kreidler’s rule is flawed and it would neither benefit consumers nor provide greater clarity.
“We would ask the commissioner to withdraw his regulations and work with insurers cooperatively on a cost-effective approach that would deliver more information that is useful to most consumers, while also protecting proprietary information, supporting competition, and encouraging innovation,” Sektnan said in a statement. “We offer our willingness to explore how we could assist the commissioner in his stated goals, before he moves forward with proposing a regulation that will, in all likelihood, be fatally flawed on legal, technical, and other grounds.”
“If you eat at restaurant or go to the grocery store, you get a receipt showing what you’ve paid for and what made up your total bill,” Kreidler said in a statement. “Why can’t your insurance company tell you the same type of information? There are many factors that determine how much you pay for insurance. You deserve to know what they are and what you can do to get a better rate.”
Christian Rataj, senior regional vice president of NAMIC’s Western region, took issue with the restaurant bill comparison because a food bill doesn’t itemize costs like labor, rent, or food ingredients, and he expressed concern that the proposed regulation “is impractical, unworkable, and more likely to confuse not inform insurance consumers.”
“Although NAMIC supports informed consumer choice, the proposed regulation attempts a complex risk assessment to oversimplify – to the detriment of consumers – the rating process that considers a multitude of independent, interconnected, and interactive risk variables,” Rataj said in a statement.
The proposal in its current form requires insurers provide their policyholders with a “Premium Change Disclosure Notice” that explains the premium change and the dollar amount or percentage of each factors’ impact on their new premium.
Kreidler’s office has scheduled a public meeting on the draft proposal on June 14 at 9 a.m. PST via Zoom.
Related:
- Insurers: Washington Commissioner’s ‘Rushed’ Regulatory Process Will Hurt Policyholders
- Credit-Based Insurance Scores – The Battle Heats Up
- 50-Plus Insurers Met Deadline to Comply With Washington’s Credit Rule
Topics Carriers Washington
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