A Washington state judge ruled on Monday that Washington Insurance Commissioner Mike Kreidler exceeded his authority when he issued a rule banning the use of credit-based insurance scores.
Judge Indu Thomas had initially struck down the rule on July 29.
“Commissioner Kreidler’s rule disrupted the Washington insurance marketplace and forced over a million policyholders to pay higher insurance rates. Today’s final order is an important victory for Washington consumers, particularly lower risk senior policyholders who were forced to pay more to subsidize higher risk policyholders because the rule eliminated the use of credit,” declared a joint statement by four trade associations. “We are pleased the court considered our legal arguments and agreed that the Commissioner exceeded his authority when he put forth a rule to ban the use of credit-based insurance scores for an indefinite time but for no less than three years. Judge Thomas agreed with our arguments that Commissioner Kreidler exceeded his authority when he acted contrary to the longstanding statute that authorized the use of credit in the property and casualty insurance space.”
The four trade associations were the American Property Casualty Insurance Association, Independent Insurance Agents and Brokers of Washington, National Association of Mutual Insurance Companies and Professional Insurance Agents of Washington.
In her opinion, Judge Thomas wrote the general rating standard statute that prohibited “excessive, inadequate, or unfairly discriminatory” rates could not be used to “eliminate all meaning from the more specific credit history statutes by which the Legislature had authorized its use.”
