Credit Scoring in Washington: Part 1 — Sen. Mark Mullet’s Middle Ground


The controversial business of using credit scores to set insurance rates continues in Washington State. As regular readers know, Washington Insurance Commissioner Mike Kreidler instituted a full ban last year. It was ruled unconstitutional by a Thurston County Washington superior court. Undeterred, and in spite of his ruling causing insurance rates for auto and homeowners to skyrocket, the commissioner continues moving forward on a total ban. 

After fielding bunches of complaints from consumers, and after considering similar arguments it fielded last year when Kreidler first proposed a total ban, Washington’s Senate Business, Financial Services & Trade Committee is looking at a bill that sits somewhere between a complete ban and no ban at all. 

Senate Bill 5623 is sponsored by committee chairman and Washington Sen. Mark Mullet. The Issaquah Democrat says he wants to find a middle ground.

“During that four or five months when a credit scoring ban was in place, we did hear — as this committee suspected — and based on testimony last year, that 90% of the seniors attempting to renew policies were experiencing the largest increase they’ve ever seen in their entire lives,” Mullet told those attending last week’s hearing. “That brings us to the bill that’s in front of us. It’s copying what our neighbor to the South (Oregon) does. What they’ve tried to do is say that you can use credit [scoring] when you’re a new customer and the company doesn’t know where to put that person in a risk level. But after that — upon renewal — credit can only be used to benefit that customer. It can only be used to help lower their rates.”

The middle ground — said Kenton Brine, president of the Northwest Insurance Council — has been hard to find since Commissioner Kreidler did his unilateral ban. Ironically, Brine said the commissioner’s staff agrees. With that he shared statistics that the Office of the Insurance Commissioner presented at a hearing earlier this year.

61% of consumers saw a rate increase due to the loss of their good credit rating
39% saw a rate decrease

In testimony before the committee, PIA Washington Executive Vice President Clark Sitzes said the bill is fully supported by the PIA Washington. He — like others — noted that seniors on fixed-incomes have been hit hardest and he quoted a letter sent to the association by a 79-year old senior.

“Charles Nyland said he had a $5,203 increase in his combined homeowners and auto insurance. That’s about a 43% overall combined increase,” Sitzes told the committee. “If that is not excessive, I don’t know what is.”

Sitzes added the use of credit scores to set rates has worked perfectly in Washington for over 20-years and it rewards those who are good drivers. “For the last 30-years I have never heard anybody complain about credit until the last two years when the commissioner brought it to the forefront,” he said.

He also took exception to testimony offered by a representative from Governor Jay Inslee’s office.

“Something that bothers me is the testimony from a person at the governor’s office who said that someone with a DUI and good credit score gets a better rate than someone with lower credit,” Sitzes told the committee. “I would challenge them on that. I’ve been doing this for over 30-years and I’ve never heard of anything like that. A DUI is a pretty serious offense and comes to a high price for the insurer.” 

Wayne Lunday of High Cascades Insurance also testified for the PIA. Lunday has offices in Castle Rock and Longview, Washington. 

“Losing these credits has a significant effect on the rates of many people around the state — and not just seniors,” he said. “Insurance agents like me saw the premiums dramatically increase. We shared that with you and with the courts last year while trying to get this rectified. Continuing in the direction the commissioner is going is going to have a horrible, detrimental effect on the State of Washington.”

The American Property Casualty Insurance Association (APCIA), the National Association of Mutual Insurance Companies (NAMIC) and the Northwest Insurance Council (NWIC) released a joint statement after Sen. Mullet’s hearing. 

“APCIA, NAMIC, NWIC,  and insurers in Washington are interpreting SB 5623 as a 
‘middle ground’ between the current regulated used of credit-based insurance scores, which has been authorized by statute since 2002, and a full prohibition that has been sought by the Office of the Insurance Commissioner. Based on our experience with a similar statute in Oregon, this bill is workable,” the statement said.

Here is a link that will give you access to all of the testimony:


About PIA Western Alliance

The Professional Insurance Agents Western Alliance is a membership organization promoting and enhancing the success of independent agencies seeking to grow, learn and be heard within the industry.


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