Last year, Washington Insurance Commissioner Mike Kreidler unilaterally banned the use of credit scoring to set auto, homeowners or renters insurance rates. The PIA Washington and other insurance groups filed suit and a Thurston County Superior Court judge ruled that Kreidler did not have the authority to institute a ban.
The ban was in place for a few months and during that time, insurers — as they warned the commissioner would happen — raised rates. Statistics produced by the commissioner’s office found that 61% of consumers saw their rates rise.
After the judge issued the ruling, Kreidler continued his pursuit of a ban and today is holding hearings to put one in place for three years. As part of the hearing process on his plan, Kreidler ordered insurers to give his office information on what happened to premiums after his ban attempt.
He gave them until December 20th of last year to respond.
The commissioner’s office issued a news release last week saying that — no surprise — just 12 companies have responded. That’s just 5.2% of the auto insurance market. Needless to say, Kreidler is concerned — and — disappointed.
Mark Sektnan is a vice president for the American Property Casualty Insurance Association (APCIA) and he explained why insurers aren’t responding. He said the way the commissioner wants that data produced is “flawed.”
It was also issued under the wrong statutory authority.
“First, the data call does not isolate increases caused by the ban on use of credit-based insurance scores from changes in premium due to approved, non-credit related factors like changes due to driving record or claims,” he said. “Second, this data call was sent to only a subset of companies — those writing over $1,000,000 in annual premium — and it requests data for a limited time (August 1, 2021, to December 1, 2021), which is not a full renewal cycle.”
Sektnan said that means the data will have absolutely no relevance to the permanent rule the commissioner is currently seeking. He also noted the demand for data will make proprietary information available to the public — and to the competitors of each insurer. “The Commissioner is effectively asking companies that voluntarily respond to his data call to waive the confidentiality protections provided by Washington law,” he said.
Kreidler’s response to the non-response of insurers is predictable.
“I’m extremely disappointed that the majority of insurance companies are not being transparent with me or the people of Washington state,” Kreidler said. “The information I’ve requested is not trade secret. I simply want them to show me how this rule has impacted their policyholders and how they communicated the change to them. I’m beginning to wonder what they don’t want me or the public to see.”
With that he extended the deadline to the end of January.
Source link: The Center Square — https://bit.ly/33uEbn4
Source link: Washington Department of Insurance — https://bit.ly/3KlGHwm