Suit Pitting Insurers Against Washington Commissioner Getting Heard
A case pitting several insurer groups against Washington Insurance Commissioner Mike Kreidler is set to be heard on Friday morning.
The Independent Insurance Agents and Brokers of Washington, the Professional Insurance Agents of Washington and the American Property Casualty Insurance Association have joined together in a lawsuit to stop emergency regulations recently filed by Kreidler to ban the use of credit history in certain types of insurance.
The groups filed a petition for declaratory and injunctive relief in early April in Superior Court, which asks the court to declare the commissioner’s action invalid and enjoin its enforcement.
This case will be the subject of a hearing in the Thurston County Superior, Court at 11 a.m.
Ahead of the hearing, the groups issued several statements.
“Commissioner Kreidler has taken an extreme action that exceeds his authority, bypasses the legislature, and robs consumers of the benefits of a highly competitive private market,” said Claire Howard, APCIA senior vice president, general counsel, and corporate secretary. “Since 2002, the legislature has explicitly authorized insurers’ use of credit history. “Commissioner Kreidler is incorrect in his position that credit scores are unreliable because of the pandemic. A report by Lexis Nexis Risk Solutions demonstrates that credit scores overall remained stable during 2020 with no substantial shift. Furthermore, data shows that Washington enjoys the third highest credit scores in the country.”
Kreidler has been working to eliminate credit scores from insurer consideration for some time. His most recent effort failed when a bill he backed, Senate Bill 5010, was gutted by an insurance industry amendment in the Senate Business, Financial Services & Trade Committee on Feb. 15.
He has previously agued that “credit scoring institutionalizes racism and holds down people with low incomes.”
The group’s argue that the commissioner’s actions exceed his statutory authority, violate the separation of powers between the executive and legislative branches of government and directly conflict with several existing statutes.
“More significantly, these regulations could cause significant market disruptions at a time when businesses and consumers are working together on long-term economic recovery,” Howard said. “In the end, it is Washington consumers who will suffer, at the very worst time for the state’s economy and family budgets. We look forward to working through the judicial process to remedy this abuse of power.”
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