The American Property Casualty Insurance Association takes legal action to end regulations that will likely raise insurance rates for more than a million consumers in Washington

WASHINGTON, April 7The American P&C Insurance Association issued the following statement on April 6, 2021:

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The following statement concerns the legal proceedings initiated today by the American Property Casualty Insurance Association (APCIA) in response to emergency regulations recently filed by Washington’s Insurance Commissioner Mike Kreidler, which prohibit the use of credit-based insurance scores in rating and underwriting insurance. This statement can be attributed to Claire Howard, Senior Vice President of APCIA, General Counsel and Corporate Secretary.

“APCIA and our members who underwrite auto, home and tenant insurance policies in Washington strongly oppose the unilateral action taken recently by the Washington Insurance Commissioner Mike Kreidler. The Commissioner’s extreme action exceeds his authority, bypasses the legislature and deprives consumers of the benefits of a highly competitive private market.

“That is why APCIA has taken legal action to remedy this abuse of power. A request for declaratory and injunctive relief was filed today in Superior court in Thurston County, which asks the Court to declare the action of the Commissioner invalid and to prohibit its execution. This lawsuit seeks to prevent the Commissioner from acting beyond the scope of his authority and to require him to comply with existing laws governing the use of credit-based insurance ratings by the credit industry. insurance, among other laws.

“Commissioner Kreidler is trying to ban an important risk-based scoring tool that has been in place for almost 20 years for the benefit of consumers. The Commissioner is trying to get around the Washington Legislature by taking action that the legislature recently explicitly rejected.

“The arbitrary and capricious actions of Commissioner Kreidler will harm more than a million Washington frequent insurance consumers Washington, who now pay less for auto, home and tenant insurance because of the use of credit insurance scores to effectively predict risks and set accurate rates.

“Most consumers save money when credit-based insurance scores are used to gauge the amount they pay for insurance. Insurance scores are not credit scores like the ones used. by banks to offer loans or credit cards. Insurers use specific information about how consumers use credit. as a factor in offering consumers the most affordable and accurate rate. Many other factors determine how much you pay for insurance, but not race or income. Without these tools, insurance rates could rise for over a million Washingtonians already struggling to pay bills during the recession pandemic COVID-19.

“A new report from Lexis Nexis shows that during the COVID-19 pandemic, credit insurance scores remained stable nationwide and in Washington, and there is no information to conclude that a decrease is in progress, so that the Commissioner Mike Kreidler emergency rule unnecessary and truly detrimental to those who pay for auto, home and tenant insurance.

Equally important, when a legislative solution was on the table to help consumers facing extraordinary life circumstances such as financial setbacks from COVID, Kreidler objected, insisting on an all-or-nothing ban. “.

“These actions go beyond the statutory authority of the commissioner, violate the separation of powers between the executive and legislative branches of government, and are in direct conflict with several existing laws, including those that regulate, but clearly allow, that credit information be taken into account by insurers.

“In addition, these regulations could cause significant market disruption at a time when the business community is working together for a long-term economic recovery. Washington consumers who will suffer, at the worst possible time, for the state economy and family budgets. That is why we are seeking to remedy this abuse of power in the courts. “

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