Update: Washington Credit Score Study

Washington Insurance Commissioner Patty Kuderer wants the Legislature to pass a bill to study the feasibility of using credit scoring to help set insurance rates. The Legislature decided not to proceed with her request.

Sort of.

Kris Tefft is the Executive Director and General Counsel for the Washington Self Insurers Association (WSIA) and has helped the PIA on several issues in the Washington Legislature. He said the leadership in the Legislature is reluctant to revisit the issue.

“The bill was never brought up for a hearing, or for movement in the House Consumer Protection & Business Committee,” he told Weekly Industry News. “The majority of members felt there had already been a study of what might happen if the use of credit history in underwriting was banned under the former [Mike Kreidler] Commissioner’s emergency rule. Premium rates skyrocketed and legislators across the state got an earful from constituents.”

PIA Western Alliance Executive Vice President Kim Legato said agents bore the brunt of the complaints over Kreidler’s decision.

“Our office heard from many agents and consumers during the credit scoring debacle,” she said. “I’ll never forget some of the calls and letters we received from seniors on fixed incomes upset about it.”

Tefft said though the Legislature didn’t act on the bill, it did actually give Kuderer what she wants.

“Even though the bill did not advance, both operating budgets contain provisos basically copying the same language as the bill and provides funding and direction to the Commissioner to perform the study,” he said. “So, while the idea died in bill form, it was resurrected in budget form. It remains to be seen whether, and in what form it will be part of the final operating budget compromise between the House and Senate and the Governor. But given that it is in both the current House and Senate proposals and doesn't cost the general fund anything, it has above even odds of passing.”

And who pays for the study?

“My understanding is that it’s paid for out of an appropriation from the commissioner’s regulatory account which comes out of premium taxes so no general fund impact,” Tefft told Weekly Industry News. “The insurers get to pay for the office to conduct it, even if they’re wary of the design of it.”