Court issues stay on Washington insurance credit rating ban

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A Washington judge suspended a rule banning the use of credit scoring by insurers in that state and consolidated cases challenging the decision, until the merits of the cases are decided.

The rule imposed by Insurance Commissioner Mike Kreidler was due to go into effect on Friday. It prohibits the use of credit-based insurance scores in insurance pricing and underwriting beginning March 4 until three years after the end of a federal or state emergency declaration, whichever is longer. of them.

Last week, 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 joined the National Association of Mutual Insurance Companies to file a joint motion to transfer and consolidate petitions filed separately. in Thurston County Superior Court.

Washington Insurance Commissioner Mike Kreidler

The court consolidated the cases and e until the merits of the case were decided.

The group released a statement from Claire Howard, Senior Vice President, General Counsel and Corporate Secretary of APCIA.

“Commissioner Mike Kreidler’s permanent rule raises rates for more than one million Washington consumers,” Howard’s statement read. “We are pleased that the court has consolidated the legal challenges, transferred the separately filed motions to a single court and approved an immediate stay of the permanent rule. We look forward to explaining our legal arguments against this onerous and unnecessary rule that ignores risk-based pricing and increases premiums for low-risk consumers in Washington.

A spokesperson for Kreidler’s office declined to comment.

In mid-February, APCIA and its co-petitioners PIA and IIABW, along with NAMIC, filed a joint motion to transfer and consolidate motions filed separately in Thurston County Superior Court challenging the Commissioner Kreidler’s permanent rule prohibiting credit history for at least 3 years.

The joint motion was submitted to Judge Wilson. On February 23, Judge Wilson denied transfer of both motions to her court and assigned the issue of consolidation and integrated transfer to NAMIC Judge Indu Thomas. A hearing was held before Judge Thomas on February 25, 2022.

Thomas consolidated the APCIA, PIA, IIABW and NAMIC petitions in his court and suspended the permanent rule with immediate effect. The permanent rule, which would have been effective March 4, will remain suspended until the judge issues a final ruling on the merits. We do not expect an order setting out the schedule for briefings and arguments on the merits to be issued until the Commissioner’s Office produces the agency record compiled in support of the permanent rule that is the subject of the suspension.

Kreidler is also proposing a new “transparency rule” requiring insurers to provide policyholders with a written explanation for any premium changes.

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