APCIA files lawsuit to stop regulations banning use of credit scores for insurance rates
The American Property Casualty Insurance Association (APCIA) has filed a lawsuit against Washington Insurance Commissioner Mike Kreidler, to put a stop to the commissioner’s recent emergency regulations which ban the use of credit-based insurance scores in the rating and underwriting of insurance.
The industry group’s petition for declaratory and injunctive relief was filed in Superior Court in Thurston County. The suit asks the court to declare the commissioner’s regulations invalid, and to enjoin its enforcement.
“APCIA and our members that write auto, home and renters’ insurance policies in Washington strongly oppose the unilateral action taken recently by Washington Insurance Commissioner Mike Kreidler. The Commissioner’s extreme action exceeds his authority, bypasses the legislature, and robs consumers of the benefits of a highly competitive private market,” said APCIA senior vice president, general counsel, and corporate secretary Claire Howard in a statement.
Howard added that the lawsuit is about “stopping the commissioner from acting beyond the scope of his authority and requiring him to comply with existing statutes governing the use of credit-based insurance scores by the insurance industry.” The group SVP also said that Kreidler is attempting to ban an important risk-based rating tool that has been in use for nearly 20 years “for the benefit of consumers.”
The commissioner’s move to ban credit-based insurance pricing “will harm more than a million of Washington’s hard-working insurance consumers,” Howard commented. She said that these consumers currently pay less for auto, home, and renters’ insurance because of the use of credit-based insurance scores “to effectively predict risk and set accurate rates.”
The SVP also cited a recent report by Lexis Nexis Risk Solutions, which found that during the pandemic credit-based insurance scores remained stable nationally, and that there is no indication that a decline would soon occur. This, Howard says, makes Kreidler’s emergency rule unnecessary and actually harmful to insurance consumers.