Washington state Insurance Commissioner Mike Kreidler’s adoption this week of a rule prohibiting insurers from using credit scoring to set rates for auto, homeowner and renter insurance has already drawn a legal challenge from insurer groups, the Associated Press reported. The American Property Casualty Insurance Association, the Professional Insurance Agents of Washington, and the Independent Insurance Agents and Brokers of Washington on Wednesday jointly filed two legal actions — an administrative challenge and a superior court lawsuit — seeking to stop the rule, which is set to take effect March 4 and last for three years after the end of pandemic-related federal and state emergency financial protections, whichever is longer. Kreidler’s office started the process of implementing the permanent rule — announced Tuesday — after an emergency rule the commissioner issued last year was struck down by a court, which found there was no justification to bypass normal rulemaking procedures. Kreidler said he’s also proposing a new rule that would require insurers to provide policyholders with a written explanation for any premium change. He said that once federal pandemic protections end, people who have struggled financially over the past two years are at risk of have delinquencies show up on their credit reports, and noted that insurers charge good drivers with low credit scores nearly 80% more for mandatory auto insurance.
