(The Center Square) – Washington Insurance Commissioner Mike Kreidler is going full speed ahead in his efforts to ban credit rating in insurance pricing, in spite of an earlier legal defeat.
“The insurance industry in Washington wants to hang on to an unjust, secretive and unrealistic method to determine what consumers pay for insure their vehicles and homes,” Kreidler said in a statement. “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.”
Thurston County Superior Court Judge Mary Sue Wilson granted summary judgement to the insurance industry Oct. 8 and struck down Kreidler’s ban on insurance pricing by emergency rule.
The Office of the Insurance Commissioner (OIC) called it a “narrow ruling.” Kreidler vowed to “continue the fight to permanently ban credit scoring” and claimed to be “considering my options.”
Several insurance lobbies issued a joint statement last week calling on Kreidler to reconsider.
“Commissioner Kreidler’s rule created hardship and frustration for more than a million Washington policyholders,” the insurance industry representatives said. “Like the old glassware shop signs used to say: ‘If you break it, you own it.’ Commissioner Kreidler broke Washington’s insurance market. He should own that – and fix it. Withdrawing his proposed permanent rule so insurers can return to their formerly approved rates is the right first step in repairing the marketplace. He should do so immediately.”
The OIC announced Tuesday that Kreidler had “rejected a recent call from the American Property Casualty Insurance Association and the National Association of Mutual Insurance Companies to abandon his commitment.”
Instead, a public hearing on a “permanent” rule, which would ban credit pricing in insurance for three years, is set for Nov. 23.
The OIC will attempt to have that rule in place by Jan. 1. Litigation almost certainly would follow.
“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 to be used,” said Mark Sektnan, vice president for state government relations at American Property Casualty Insurance Association. “It means higher premiums for more than a million low-risk policyholders who purchase auto, homeowners’ insurance, renters’ insurance, and other personal lines of coverage.
“The use of credit history is authorized by statute and has been in place for nearly 20 years in Washington,” Sektnan said.