Senate Bill 5589 — Study of Credit History and Credit-Based Insurance Scores (Washington, 2025)

Summary

Senate Bill 5589 of the State of Washington, 69th Legislature, 2025 Regular Session, introduced by request of Insurance Commissioner and referred to the Committee on Business, Financial Services & Trade. The bill is an act relating to conducting a study of credit history, credit-based insurance scores, and other rate factors that may disparately impact Washington residents, in making rates for personal insurance. It directs the insurance commissioner to submit a preliminary report to the relevant policy committees by December 31, 2025, and a final report by September 15, 2026. It provides that the section expires December 31, 2033.

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Full text

     Z-0341.1

                               SENATE BILL 5589


     State of Washington       69th Legislature        2025 Regular Session

     By Senators Hasegawa, Kauffman, Lovelett, Nobles, Saldaña, Stanford,
     and C. Wilson; by request of Insurance Commissioner

     Read first time 01/30/25.      Referred   to   Committee   on   Business,
     Financial Services & Trade.




 1       AN ACT Relating to conducting a study of credit history, credit-
 2   based insurance scores, and other rate factors that may disparately
 3   impact Washington residents, in making rates for personal insurance;
 4   creating a new section; and providing an expiration date.


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


 6       NEW SECTION.   Sec. 1.  (1) The legislature finds that insurers'
 7   use of credit history, credit-based insurance scoring models, and
 8   other rate factors that may disparately impact Washington residents,
 9   to make personal insurance rates, may be impacting Washington
10   residents in unintended or unacceptable ways. The legislature further
11   finds that establishing public policy for ensuring personal insurance
12   availability and pricing that is consistent with legislative
13   expectations requires actuarial evaluation of insurers' current use
14   of credit history, credit-based insurance scores, other rate factors
15   that may have disparate impacts on Washington residents, and
16   alternatives to their use, for purposes of rates, premiums, or
17   eligibility for coverage.
18       (2) The office of the insurance commissioner shall conduct a
19   study of insurers' use of credit history, credit-based insurance
20   scores, other rate factors that may have disparate impacts on
21   Washington residents, and alternatives to their use, in determining
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 1   personal insurance premiums, rates, or eligibility for coverage, and
 2   the associated impacts to consumer costs and the availability of
 3   insurance.
 4       (3) In conducting the study, the insurance commissioner shall:
 5       (a) Collect information from entities transacting personal
 6   insurance as defined in RCW 48.19.035. The identified authorized
 7   insurers are required to provide the requested information to the
 8   insurance commissioner;
 9       (b) Investigate and obtain any other relevant information that
10   may assist the insurance commissioner with analyzing insurers' use of
11   credit history, credit-based insurance scoring models, other rate
12   factors that may disparately impact Washington residents, and
13   alternatives to their use, in determining personal insurance
14   premiums, rates, eligibility for coverage, and evaluating the
15   associated impacts to consumer costs and the availability of
16   insurance; and
17       (c) Contract with actuaries and other consultants, as needed, to:
18       (i) Analyze insurers' use of credit history, credit-based
19   insurance scoring models, or other rate factors that may disparately
20   impact Washington residents, in determining premiums, rates, and
21   eligibility for coverage for people of various races, ethnicities,
22   sexes, socioeconomic status, and national origins;
23       (ii) Identify and analyze alternative rate factors that could be
24   used to determine premiums, rates, and eligibility for coverage that
25   neither rely on credit history or credit-based insurance scoring
26   models, nor disparately impact Washington residents of various races,
27   ethnicities, sexes, socioeconomic status, or national origins;
28       (iii) Analyze the likely impact of insurers' uses under (c)(i) of
29   this subsection, and alternative rate factors identified under
30   (c)(ii) of this subsection, on consumer costs, rates, premiums
31   eligibility for coverage, and availability of insurance for people of
32   various races, ethnicities, sexes, socioeconomic status, and national
33   origins; and
34       (iv) Develop for legislative consideration, policy options and
35   their likely impacts on consumer costs, premiums, rates, eligibility
36   for coverage, and the availability of personal insurance, of use of
37   rate plans that include and exclude credit history, credit-based
38   insurance scoring models, or other rate factors that may have a
39   disparate impact on Washington residents.


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 1       (4) Consistent with RCW 43.01.036, the insurance commissioner
 2   shall submit a preliminary report to the relevant policy committees
 3   of the legislature by December 31, 2025, and a final report by
 4   September 15, 2026, with review findings, policy options, and
 5   recommendations regarding allowance, prohibition, or contingent use,
 6   of credit history, credit-based insurance scoring models, other
 7   disparately impactful rating factors, and alternatives to their use,
 8   for personal insurance, and the associated impacts on consumer costs,
 9   premiums, rates, eligibility for coverage, and availability of
10   insurance   for  people   of   various  races,   ethnicities,  sexes,
11   socioeconomic status, and national origins.
12       (5) Data requested by, or provided to, the insurance commissioner
13   and the insurance commissioner's contracted consultants for the
14   purpose of complying with the study and reporting requirements in
15   this section is confidential by law and privileged, and is not
16   subject to public disclosure under chapter 42.56 RCW. Nothing in this
17   section prohibits the insurance commissioner from preparing and
18   publishing reports, analyses, or other documents using the data
19   received under this section so long as the data is in aggregate form
20   and does not permit the identification of information related to
21   individual companies. Data in the aggregate form is deemed open
22   records available for public inspection. Nothing in this section
23   affects, limits, or amends the insurance commissioner's authority
24   under chapter 48.37 RCW.
25       (6) This section expires December 31, 2033.

                                  --- END ---




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