Washington Insurance Commissioner Mike Kreidler tried — in vain — to do away with credit scoring in Washington State. The PIA Washington led charge and joined with other insurance associations to stop Kreidler in his tracks.
Judges twice told the commissioner that he does not have the legal authority to do away with credit scoring. That is the province of the Washington Legislature. It did not address the issue in the just ended annual session.
That leads to the real problem Kreidler has with credit scoring. It involves auto insurance. So to do an end run around the legal, legislative side of the issue of credit scoring, Kreidler has begun a different — and more legal — assault on auto insurers.
At renewal time, Kreidler wants new rules put in place that require insurers to give consumers an extensive explanation of why their rates are rising. His plan is very complex and — in some ways — unworkable for both insurers and consumers.
Kenton Brine is the president of the Northwest Insurance Council. Last week he told Weekly Industry News that industry associations are tracking Kreidler’s current efforts. Brine agrees that consumers need accurate information from insurers and that the information needs to be understandable.
He says what Kreidler is wanting is not going to help anyone.
“From the beginning of the OIC’s yearlong rulemaking process, our primary concern has been that providing information that is excessively complex would defeat the purpose of the rule,” Brine told Weekly Industry news. “What good to the average policyholder is a 13-page analysis of an algorithm, produced at a cost of millions of dollars — and ultimately paid for by policyholders? We believe that the rule’s requirement providing a more straightforward explanation of a premium increase to a policyholder at their request starting next year makes sense. But we hope the OIC will reconsider the second phase of the rule that begins in 2027. Providing excessively granular information will frustrate policyholders and needlessly raise the cost of insurance in Washington.”
The next step in Kreidler’s plan is a workshop. Kreidler says the workshop is needed to address “historic” numbers of complaints about auto insurance increases. The commissioner says auto insurance complaints jumped from 2,216 in 2020 to 3,045 in 2021 and 3,276 last year.
That’s a 48% increase over a two-year period.
The virtual workshop will be held on July 17th. Kreidler said it will gather information from the insurance industry, the auto repair and restoration contractor industry, claim experts, and consumers to determine how his office will address the issue.
The meeting is open to the public and will run from 11am to 1pm. Most of us can’t attend but we can see the hearing via Zoom. The commissioner’s office will send out an email sometime this week on how to link up to Zoom and attend.
Source link: Washington Department of Insurance — bit.ly/3PaDggR