Judge overturns state ban on credit-based insurance scores

A Washington state judge has struck down a state rule banning the use of credit-based insurance scores.

On Monday, Judge Indu Thomas issued a final order saying Washington State Insurance Commissioner Mike Kreidler exceeded his powers when he issued a permanent rule banning the use of insurance scores based on credit. Indu first ruled against the insurance commissioner from the bench on July 22. The entry of the final order on Monday marked the end of the rule.

“Commissioner Kreidler’s rule disrupted the Washington insurance market and forced more than a million policyholders to pay higher insurance rates. Today’s final order is a significant victory for Washington consumers, especially low-risk senior policyholders who were forced to pay more to subsidize higher-risk policyholders because the rule eliminated the use of credit,” said a joint statement issued by the four trade associations that challenged the rule – the American Property Casualty Insurance Association, the Independent Insurance Agents and Brokers of Washington, the National Association of Insurance Companies Mutuals and Professional Insurance Agents of Washington.

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“We are pleased that the court considered our legal arguments and agreed that the commissioner exceeded his powers when he proposed a rule prohibiting the use of credit-based insurance scores for an indefinite period but not less than three years,” the associations said. . “Judge Thomas agreed with our arguments that Commissioner Kreidler exceeded his powers when he acted contrary to long-standing law that authorizes the use of credit in the field of property and casualty insurance.”