Approved Filings to Remove the Use of Credit
The OIC has received around 160 filings to remove credit scoring to comply with the emergency rule. As of 5/13, 104 filings have been approved. Here is a listing of the insurance companies who have filings to the OIC to remove the use of credit scoring as required by the emergency rule: oicapprovedfilings513.pdf
Court Denies Industry Challenge to Emergency Rule on Credit Scoring
A Thurston County Superior Court judge on April 23 denied the insurance industry's request to halt an emergency rule that temporarily bans the use of insurance credit scoring in Washington. The ruling that rejected a request for a preliminary injunction maintains Commissioner Kreidler's emergency rule issued March 23.
IIABW, PIA, and the American Property Casualty Insurance Association (APCIA) argued that the OIC exceeded its authority and bypassed the legislature with their emergency rule. Insurance carriers predict over one million Washington residents will face double digit rate increases on auto, homeowners and renters insurance as a result of the rule starting on June 20th.
The industry is reviewing our legal options and next steps in the litigation process to overturn this preliminary trial court decision.
OIC's Emergency Rule Banning Credit Scoring
The OIC created an FAQ for the implementation of the emergency rule. According to the OIC, “The emergency rule applies to personal auto, homeowners and renters coverage. Personal auto includes motorcycles and RVs. Homeowner's coverage includes dwelling property, mobile homeowners, manufactured homeowners and condominium owner's coverage. The rule does not apply to commercial lines, personal liability and theft coverage, earthquake coverage, personal inland marine coverage, or mechanical breakdown coverage.“
The emergency rule requires insurers to stop using credit history to calculate premiums or for underwriting for new policies or renewals after June 20, 2021. Carrier filings to remove the use of credit scoring were required to be submitted to the OIC by May 6, 2021. The OIC asked carriers to “minimize the complexity of these filings," to “not include other changes to rates and rules that are not necessary for removing CBIS factors" in these filings and these changes should not increase or decrease the total premiums for the insurer's book of business.
"For renewal policies, the emergency rule applies to renewals processed on or after June 20, 2021. Under WAC 284-24-115(1), you may use an effective date for renewal policies up to sixty days after the effective date for new business policies."
The "OIC cannot guarantee a specific approval date" for the filings. The "OIC intends to complete initial review of each such filing within four business days. Provided that filers respond promptly to any objections raised following OIC review, OIC believes there is sufficient time to process all the required filings."
IIABW's Opinion on the Emergency Rule
IIABW is disappointed that two bills which would have created additional credit scoring consumer protections were not passed during the 2021 legislative session. We believe that the two bills that passed through policy committees but were blocked from a final vote would have been some of the most far-reaching protections for consumers relating to credit scoring ever passed in our state.
- SB 5010 (as amended) would have allowed the use of credit scores at initial underwriting and rating but would have banned its use for renewals (unless it benefited the customer).
- HB1351 would have allowed consumers to seek credit scoring rating relief if they were experiencing an 'Extraordinary Life Circumstance', including: death of a family member, divorce, interruption of alimony/child support, identify theft, loss of employment, military deployment, etc.
IIABW believes that these two bills would have benefited insurance consumers without significantly disrupting the market at a time when our state is working together on long-term economic recovery. IIABW has collaborated with the OIC and legislature numerous times over the last twenty year on regulations to protect consumers from unfair use of credit scoring. We hope to find some middle ground during the 2022 legislative session on this important issue.