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Washington Judge Rules Against Insurance Industry on Temporary Credit Score Ban

May 14, 2021 – Matt Albrecht

Washington Judge Rules Against Insurance Industry on Temporary Credit Score Ban

According to a report from the Insurance Journal, a state judge has ruled in favor of the Washington Insurance Commissioner and against an insurance company interest group. As a result, the state’s temporary emergency freeze on the use of credit scores in insurance pricing will remain in place. In this article, our Spokane insurance lawyers provide an overview of the state agency’s temporary rule and the court’s decision.

Temporary Rule: No Discriminatory Pricing Based on Credit Score

In March, Washington State Insurance Commissioner Mike Kreidler put a temporary rule in place that bars insurance companies from using a consumer’s credit score as the basis to charge higher premiums. Notably, the federal CARES Act put similar regulations in place. However, the federal protections on this matter are likely to expire later this year.

By taking action before the CARES Act provision officially runs out, Washington State regulators will keep these protections in place for an additional three years, after the federal law sunsets. The rule stops insurance companies from charging consumers more for auto insurance or homeowners’ coverage on the basis of their credit history.

An Insurance Company Group Sued to Block the Washington Regulation

Almost immediately after Washington’s new state rules were announced, the big insurance industry lobbying groups declared their opposition. Several groups and organizations joined together to file a lawsuit aimed at stopping the Washington State Insurance Commission from putting the emergency regulations in place.

Judicial Decision: No Injunction, New Rules Can Still Go Into Place

The insurance industry backed lawsuit was heard by the Thurston County Superior Court. Upon reviewing the initial complaint, Judge Mary Sue Wilson determined that the insurance groups were “unlikely” to succeed on the merits of their case. As a consequence, she decided that an injunction should not be put in place to stop the Washington State regulations from taking effect. Indeed, she assessed that Insurance Commissioner Mike Kreidler had the legal authority to issue such regulations.

The insurance industry groups pushing the lawsuit noted their opposition to her ruling. They are expected to appeal the decision and to continue fighting against Washington’s emergency regulation. Nonetheless, for the time being, insurers are still prohibited from using consumer credit scores as the basis for charging higher prices. Additionally, when the federal COVID-19 emergency declaration expires, insurers in Washington will still be barred from credit history-related price discrimination for an additional three years.

We Wrote the Book on Insurance Law in Washington

At‌ ‌Albrecht‌ ‌Law‌ ‌PLLC, our Spokane insurance lawyers have the skills and expertise to get your claim paid. As authorities on insurance law in Washington, we handle the full spectrum of insurance cases. Do not accept less than you deserve from the insurance company. If you have questions about insurance law, we will walk you through the claims process. Contact our insurance lawyers today for a free, confidential review and assessment of your case. We represent policyholders throughout the entire region, including in Spokane, Spokane Valley, Reardan, Warden, Sprague, and Ritzville.

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