Washington: Credit-based Insurance Scoring Ban Bill Dies in Legislature

On Feb. 8, HB 2802, Prohibiting the use of personal credit histories and credit scores, was laid to rest by the Washington state Legislature.

The House Committee on Insurance, Financial Services & Consumer Protection put a hold on the bill on Jan. 30.

“NAMIC applauds the state Legislature for acknowledging the importance of protecting insurance carriers' ability to provide consumers with what they want and need - insurance rates that are commensurate with the consumer's personal risk of loss exposure,” said Christian J. Rataj, NAMIC’s Western state affairs manager. “National and state studies have repeatedly shown a strong correlation between a consumer's credit-based insurance score and his/her insurance risk of loss exposure."

Statistical studies have demonstrated that as many as 60 percent to 70 percent of consumers are paying less for their home or auto insurance because of the use of credit-based insurance scores in setting rates.

"Consumers are increasingly appreciating how the use of credit-based insurance scoring help carriers provide a vast array of rates and products for the benefit of insurance consumers," Rataj said. "Consumer sentiment in support of the use of credit-based insurance scoring was illustrated in 2006, when Oregon voters soundly rejected a credit scoring ban initiative by a 2-1 margin.

"Two weeks ago, lawmakers in the Colorado House of Representatives also voted down a proposed credit-based insurance scoring ban bill, which shows that state legislators are accepting the fact that all of the national and state research supports the validity and appropriateness of using credit-based insurance scoring in the underwriting and rating process," Rataj said.

Direct questions to NAMIC State Affairs Manager Christian J. Rataj.

Posted: Tuesday, February 12, 2008 12:00:00 AM. Modified: Friday, February 15, 2008 2:45:55 PM.

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We are 1,400 property/casualty insurance companies serving more than 135 million auto, home and business policyholders, with more than $196 billion in premiums accounting for 50 percent of the automobile/homeowners market and 31 percent of the business insurance market. We are the largest and most diverse property/casualty trade association in the country, with regional and local mutual insurance companies on main streets across America joining many of the country’s largest national insurers who also call NAMIC their home. More than 200,000 people are employed by NAMIC members.