The American Property Casualty Insurance Association said its insurers will following the law where it concerns Washington Insurance Commissioner Mike Kreidler’s emergency regulation banning the use of credit-based insurance scores.

Kreidler issued a reminder earlier this week that insurance companies have until a 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 APCIA joined together in a lawsuit to halt Kreidler’s ban.

APCIA issued a statement in response to Kreidler’s reminder May 6, 2021 deadline to file new rating plans to comply with his ban.

“Commissioner Kreidler has taken an extreme action that exceeds his authority, bypasses the legislature, and robs consumers of the benefits of a highly competitive private market. We continue to be disappointed that our motion for a preliminary injunction was denied last week,” said Claire Howard, APCIA senior vice president, general counsel, and corporate secretary. “Insurers always follow the law and that will be no different in Washington. Insurers will comply with this unreasonable deadline and then begin to work with agents and brokers to explain why as a result of the Commissioner’s action more than one million Washington consumers will face double digit rate increases on auto, homeowners, and renters insurance even though there has been no change in their individual risk profiles.”

The group stated it disagrees with the court’s preliminary decision, which the APCIA “believes is unfair, unjust, and punitive for Washington customers who will now have to pay more for insurance solely because of Commissioner Kreidler’s actions. We look forward to the next steps in the litigation process.”

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.

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.

*This story ran previously in our sister publication Insurance Journal.

Topics Carriers Agencies Washington