The property insurance industry has asked the Washington Supreme Court to intervene in the struggle between insurance companies and the Office of the Insurance Commissioner (OIC) over the OIC’s latest attempt to ban insurance premium pricing by credit rating.
A group of insurance organizations, including the American Property Casualty Insurance Association (APCIA), the Professional Insurance Agents of Washington, and the Independent Insurance Agents and Brokers of Washington, filed a joint petition asking the high court to step in.
These trade groups are asking the court to assert jurisdiction in the matter; stay the OIC’s rule banning the use of credit ratings in pricing for at least three years which is set to take effect March 4; and order the OIC to give the industry an administrative hearing on the matter.
The industry had requested an administrative hearing to contest the rule on Feb. 3, which the OIC rejected days later.
“Commissioner Kreidler’s rule to prohibit insurers’ use of credit-based insurance scores has caused chaos in the Washington insurance market and raised rates for over one million consumers,” charged Claire Howard, APCIA general counsel, on Thursday.
She said that the rule is “particularly harmful to seniors on fixed incomes” and warned, “Every day the permanent rule is in effect means more lower-risk Washington consumers will face higher insurance costs.”
Evidence for that harm, the insurance industry has charged, comes from the effects of Kreidler’s temporary emergency rule, doing the same thing as the somewhat confusingly named “permanent rule,” which would last for three years.
The emergency rule was put into effect in June 2021 and tossed out by Thurston County Superior Court Judge Mary Sue Wilson in October. It had a noticeable impact on the premium prices paid by Washington residents with both good and poor credit.
Commissioner Kreidler said this legal challenge is an example of the insurance industry getting ahead of itself.
“This action by the industry is premature,” Kreidler told The Center Square. “They cannot show any harm has come to Washington state consumers or our insurance market as a result of my permanent rule, which has not yet gone into effect. I am committed to following the law and protecting all Washington state insurance consumers.”
APCIA’s Howard explained why the industry’s appeal went straight to the Supreme Court and not to lower courts first.
“When an agency official such as the insurance commissioner accepts a hearing demand, holds a hearing, and issues an order deciding an administrative matter, such an order is subject to judicial review by the superior court,” she told The Center Square. “But in this instance, the insurance commissioner refused even to accept the hearing demand, let alone make any decision. Consequently, judicial review through the normal channels is not available, and our only recourse was to seek a writ of mandamus.”
She added that “Although superior courts have authority to issue such writs, the Washington Supreme Court has concurrent, original jurisdiction to issue a writ to a state official.”
It is the insurance industry’s position that “the OIC’s hearing officer’s failure to accept our demand for a hearing and to enter an automatic stay pending the outcome of the hearing was in direct violation of the applicable statutes,” Howard said. “This coupled with the permanent rule’s March 4 effective date presented the exigent circumstances that warranted our petition for a writ of mandamus to the Washington Supreme Court.”
