April 23, 2021
OLYMPIA, Wash. – A Thurston County Superior Court judge today denied an insurance industry request to halt an emergency rule that temporarily bans the use of insurance credit scoring in Washington.
The ruling that rejected a request for a preliminary injunction maintains Insurance Commissioner Mike Kreidler’s emergency rule issued March 23. Judge Mary Sue Wilson found that industry associations challenging the rule were unlikely to succeed with their arguments.
The judge ruled that Kreidler demonstrated good cause for the emergency rule and did not exceed his authority as the regulator of insurance practices in the state.
Kreidler issued the following statement in response to the ruling:
“The consumers of Washington scored a victory today. The decision essentially says the multi-billion industry and its associations are unlikely to prevail on their claims. I knew I was justified in my authority to take action to protect consumers.
The court also declared my action was not an end-around the state Legislature. This argument by the insurance industry was personally insulting.
Since I first became insurance commissioner over 20 years ago, I have heard from consumers harmed by this practice and their stories have stayed with me. Many cannot understand what their credit scores have to do with how they drive or maintain their property.
Now, the financial impacts of the pandemic on individual and families have only exacerbated the unfairness of the use of credit scores. At the same time, even with rebates and driving discounts, the industry has profited.
For far too long, the insurance industry has subsidized more well-off customers at the expense of those with lower incomes.
This rule will protect those who are the most hurt financially by the pandemic from being forced to pay even higher premiums that subsidize those whose finances have actually improved during the pandemic.
It will also protect those whose will see their credit scores plummet when pandemic credit reporting protections end.
We also know that credit scoring perpetuates another form of systemic racism that insurance companies have relied on for decades. They pride themselves on innovation and say they’re committed to social justice.
If true, it’s time for the industry to take real action and live up to their commitment. We’re still waiting for something more than their argument to maintain their profits with a discriminatory practice.
Today’s ruling sent a clear message: Treat consumers with respect.
In the meantime, I will continue the fight to permanently ban credit scoring when the Legislature returns in 2022. For now, I welcome the court’s just decision that consumers must be protected.”