Insurance commissioner looks to ban use of credit scores in insurance pricing

Insurance commissioner looks to ban use of credit scores in insurance pricing | Insurance Business America

Insurance commissioner looks to ban use of credit scores in insurance pricing

Mike Kriedler, the insurance commissioner of the state of Washington, is looking to permanently ban the use of credit scores in determining consumers’ insurance premiums next year.

The commissioner is seeking a ban on the pricing practice starting January 01, 2022. A public hearing on the proposed ban is scheduled for November 23, 2021.

“The insurance industry in Washington wants to hang on to an unjust, secretive and unrealistic method to determine what consumers pay to insure their vehicles and homes,” the commissioner said in a statement. “I will continue a well-supported effort to permanently ban credit scoring.”

Kriedler’s plans for next year come after a superior court earlier this month overturned his emergency ruling that eliminated the use of credit scores.

Read more: Judge overturns credit score ban for calculating premiums

Following the Thurston County Superior Court ruling on October 08, both the American Property Casualty Insurance Association and the National Association of Mutual Insurance Companies reached out to Kriedler, requesting that he abandon his commitment to ban the use of credit scores – but the commissioner rejected the calls.

“Consumers deserve better. The multibillion-dollar industry needs to take action to rid itself of this unreliable practice,” Kriedler said.

According to the Office of the Insurance Commissioner of Washington State, three other states – including California – have already banned the use of credit scores for insurance purposes.