Washington Senate Moves on 4 Insurance Bills

Washington Insurance Commissioner Patti Kuderer is thrilled about the state’s Senate passing three bills she supports. The first is Senate Bill 5589 that pushes for a study on how insurance companies use credit history and credit-based insurance scores to set rates for auto and homeowners insurance.

It was sponsored by Kurderer and introduced by a state senator on her behalf.

“Companies are using algorithms and technology in an increasing rate to determine premiums,” Kuderer said. “It’s my role to make sure none of those decisions are discriminatory and the data we’ll gather with this study helps us make that determination.”

PIA Western Alliance Executive Vice President Kim Legato told Weekly Industry News that credit scoring has been studied ad nauseam and the conclusions never change.

“The PIA believes that risk classification is an important priority in property and casualty insurance,” Legato said. “But politicians continue to be bring it up again and again, and the conclusions are always the same. Credit scoring is a positive for the people of Washington State and not a negative. It creates a healthy insurance climate, and we believe a healthy insurance climate means a healthy insurance agency, and when companies do well, agencies do well.”

Kris Tefft is the Executive Director and General Counsel for the Washington Self Insurers Association (WSIA). Tefft agrees with Legato and has been working with the PIA Washington on this and other issues.

“Few topics in property and casualty insurance have been studied more extensively over the last two decades than the use of credit-based insurance scores in pricing risk for auto insurance and whether it's a state regulator, independent think tank, or university that has done the studies, the results are always the same,” Tefft said. “It is a non-discriminatory tool to set rates and keep insurance available at lower cost to the consumer.”

It’s doubtful Kurderer nor the Washington Legislature will heed those words and it’s likely such a bill will pass in the House.

Another bill passed by the Senate and pushed by Kurderer is Senate Bill 5331. It gives the commissioner the authority to order insurers to pay restitution to harmed consumers. Currently, the law says the insurers can be fined for violating the law but the commissioner cannot order restitution be paid.

If this one passes in the House, an insurer can be fined up to $10,000 per violation rather than paying just a fine of $10,000 overall.

Both bills have until April 16th to pass the House.

Source: Weekly Industry News

Source link: Washington Department of Insurance — https://bit.ly/3DIlCxF

Source link: Insurance Journal — https://bit.ly/4iy5hL6