Bill Request - Delaying Rule Making on Credit Scores in Insurance Premiums, S-4132.2/22 2nd draft

Summary

Bill request from the Code Reviser's Office, S-4132.2/22 2nd draft, whose brief description is delaying the office of the insurance commissioner from conducting rule making on the use of credit scores in setting insurance premiums. Section 2 provides that the office of financial management shall appoint a mediator to convene a work group, with five members representing the insurance industry and five members representing consumer advocacy organizations and insurance regulators. The work group shall submit viable policy options to the legislature by December 1, 2022. Sections 2 and 3 each state that they expire June 30, 2023, and Section 4 states that the act takes effect immediately.

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Full text

                BILL REQUEST - CODE REVISER'S OFFICE




BILL REQ. #:         S-4132.2/22 2nd draft

ATTY/TYPIST:         MW:jlb

BRIEF DESCRIPTION:   Delaying the office of the insurance commissioner
                     from conducting rule making on the use of credit
                     scores in setting insurance premiums.
1        AN ACT Relating to delaying the office of the insurance
2    commissioner from conducting rule making on the use of credit scores
3    in setting insurance premiums until a work group can address ways to
4    reduce insurance costs for Washington residents with below average
5    credit scores; creating new sections; providing expiration dates; and
6    declaring an emergency.


 7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:


 8       NEW SECTION.   Sec. 1.    The purpose of this act is to provide
 9   insurance consumers the best possible outcome from the use of credit
10   history in the underwriting of their insurance and the determination
11   of their premium. By convening a work group to review the use of
12   credit history and its effect on insureds with low credit scores, the
13   legislature intends to offer insurers an option to continue to
14   predict risk effectively while limiting the negative outcomes a lower
15   credit score may have on an insured's premium.


16       NEW SECTION. Sec. 2. (1)(a) The office of financial management
17   shall appoint a mediator to convene a work group to examine the use
18   of credit history in insurance scores and develop viable policy
19   options for creating an insurance environment that is affordable and
20   equitable for everyone, including those with low credit scores. The
     Code Rev/MW:jlb                   1             S-4132.2/22 2nd draft
 1   mediator shall promptly meet with the representatives of the work
 2   group, either jointly or separately, and take such other steps as the
 3   mediator deems appropriate in order to assist the parties in
 4   developing a list of viable policy options to present to the
 5   legislature. The mediator may not force an agreement between the
 6   parties.
 7       (b) The work group shall consist of the following:
 8       (i) Five members representing the insurance industry, chosen by a
 9   nonprofit,   member-supported   council  representing   property  and
10   casualty insurers located in the Pacific Northwest; and
11       (ii) Five members representing consumer advocacy organizations
12   and insurance regulators, chosen by the office of the insurance
13   commissioner.
14       (c) Membership of the work group is limited to residents of the
15   state of Washington.
16       (2) The work group shall submit viable policy options to the
17   legislature, in compliance with RCW 43.01.036, by December 1, 2022.
18   At minimum, the work group shall consider the use of credit history
19   in insurance scores and methods to lower the cost of insurance for
20   individuals with low credit scores.
21       (3) To assist in the work group's deliberations, insurers shall
22   provide information relating to consumer experience with emergency
23   rules R2021-02 and R2021-19 adopted by the office of the insurance
24   commissioner. Information may be provided on an aggregate basis
25   through an insurance information organization and must be produced
26   within three months from the date of the request by the work group.
27       (4) To assist in the work group's deliberations, the office of
28   the insurance commissioner shall not adopt any rules that would
29   conflict with current law regarding the use of credit history in
30   insurance scores as established in section 3 of this act.
31       (5) This section expires June 30, 2023.


32       NEW SECTION.    Sec. 3.     (1) Rules adopted to implement RCW
33   48.18.480 and 48.19.020 shall comply with the provisions of RCW
34   48.19.035. To the extent the commissioner adopts rules in conflict
35   with RCW 48.19.035, RCW 48.19.035 controls.
36       (2) This section expires June 30, 2023.


37       NEW SECTION.  Sec. 4.  This act is necessary for the immediate
38   preservation of the public peace, health, or safety, or support of
     Code Rev/MW:jlb                   2             S-4132.2/22 2nd draft
1   the state government and its existing public institutions, and takes
2   effect immediately.

                                --- END ---




    Code Rev/MW:jlb                  3             S-4132.2/22 2nd draft


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