A key victory for Washington drivers, renters, and homeowners
OLYMPIA, Wash. – Today, Judge Indu Thomas entered the final order declaring that Insurance Commissioner Mike Kreidler exceeded his authority when he issued a permanent rule banning the use of credit-based insurance scores. Judge Thomas initially granted the industry's Petition for a Declaratory Judgment and invalidated the rule in a decision rendered from the bench on July 29, 2022. Today’s entry of the final order marks the end of the controversial rule.
This joint quote can be attributed to four trade associations (American Property Casualty Insurance Association, Independent Insurance Agents and Brokers of Washington, National Association of Mutual Insurance Companies, and Professional Insurance Agents of Washington) that filed this successful legal challenge.
“Commissioner Kreidler’s rule disrupted the Washington insurance marketplace and forced over a million policyholders to pay higher insurance rates. Today’s final order is an important victory for Washington consumers, particularly lower risk senior policyholders who were forced to pay more to subsidize higher risk policyholders because the rule eliminated the use of credit.
“We are pleased the court considered our legal arguments and agreed that the Commissioner exceeded his authority when he put forth a rule to ban the use of credit-based insurance scores for an indefinite time but for no less than three years. Judge Thomas agreed with our arguments that Commissioner Kreidler exceeded his authority when he acted contrary to the longstanding statute that authorized the use of credit in the property and casualty insurance space.”
Background on the Ruling:
After reviewing the industry’s and Commissioner’s briefs in opposition (which included an amicus brief in opposition submitted by the Consumer Federation of America, Northwest Justice Project, and Northwest Consumer Law Center) and after hearing oral arguments by both sides on July 29, 2022, Judge Thomas ruled for the Petitioners.
In rendering her decision from the bench, Judge Thomas held that the Commissioner could not rely on the more general rating standard statute that prohibited "excessive, inadequate, or unfairly discriminatory" rates to "eliminate all meaning from the more specific credit history statutes by which the legislature had authorized its use.”
The order can be found attached.
The Independent Insurance Agents and Brokers of Washington (IIABW) was founded in 1910 as a non-profit trade association organized for the benefit of independent insurance agents and brokers. IIABW's mission is to position our members for success and foster a favorable business environment and a healthy insurance industry to better serve individuals and their communities.
NAMIC membership reflects many of the country’s largest national insurers as well as regional and local mutual insurance companies on main streets across America. NAMIC members write $357 billion in annual premiums and account for 69 percent of homeowners, 56 percent of the automobile, and 31 percent of the business insurance markets.
The Professional Insurance Agents of Washington (PIA) is a statewide professional trade association representing licensed property and casualty agents across the state of Washington. Our member agents are actively engaged in the sale and service of property and casualty insurance including homeowners and auto insurance.