Most insurers don’t comply with insurance commissioner’s request for premium data

(The Center Square) – Washington Insurance Commissioner Mike Kreidler sent a second letter to insurers this week requesting they give his office information on what happened to insurance premiums after he attempted to prohibit the use of credit ratings in setting rates last year.

The letter went out to many companies that offer auto, homeowners and renters insurance in Washington state.

In a press release, the Office of the Insurance Commissioner (OIC) revealed that only 12 companies, or “5.2% of the auto insurance market” had “responded to [Kreidler’s] initial request” that they provide data on premiums by Dec. 20, 2021.

The new letter announces a lengthened timeframe, as well as disappointment.

Insurers now have until Jan. 31 to voluntarily provide the data.

“I’m extremely disappointed that the majority of insurance companies are not being transparent with me or the people of Washington state,” Kreidler said in a statement. “The information I’ve requested is not trade secret. I simply want them to show me how this rule has impacted their policyholders and how they communicated the change to them. I’m beginning to wonder what they don’t want me or the public to see.”

Mark Sektnan, vice president of the American Property Casualty Insurance Association (APCIA), explained why many insurers are reluctant to provide this data.

“The Commissioner’s December 6, 2021, data call is flawed, will produce unreliable results, and it was issued under the wrong statutory authority,” he told The Center Square in an email.

Sektnan spelled out the industry’s methodological objections to Kreidler’s request.

“First, the data call does not isolate increases caused by the ban on use of credit-based insurance scores from changes in premium due to approved, non-credit related factors like changes due to driving record or claims,” he said. “Second, this data call was sent to only a subset of companies – those writing over $1,000,000 in annual premium – and it requests data for a limited time (August 1, 2021, to December 1, 2021), which is not a full renewal cycle.”

Because of these problems, the data would have “no relevance for the proposed permanent rule, which is currently pending,” the APCIA vice president charged.

He also spelled out the legal problems with Kreidler’s calls for data.

“Although Commissioner Kreidler’s December 6 data call is ‘voluntary,’ it was issued using his general powers instead of his market oversight authority and in doing so said he will make the proprietary information provided publicly available, which includes making it available to a company’s competitors,” Sektnan said. “The Commissioner is effectively asking companies that voluntarily respond to his data call to waive the confidentiality protections provided by Washington law.”

The legal objections being mounted by the insurance industry likely mean that the new rule will be challenged in court once it is issued.

The OIC’s previous attempt to ban credit rating-based pricing by emergency rule was rejected on Oct. 8, 2021, when Thurston County Superior Court Judge Mary Sue Wilson granted summary judgment to the insurance industry.

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