The American Property Casualty Insurance Association, the Professional Insurance Agents of Washington, and the Independent Insurance Agents and Brokers of Washington jointly filed two legal actions to halt the enforcement of a rule banning the use of credit for rating purposes in Washington.

Washington Insurance Commissioner Mike Kreidler’s rule banning the use of credit scoring in the rating and underwriting of insurance will be in effect starting March 4 through three years after either the federal or state emergency declaration ends, whichever is longer.

The ban will remain in place for an indefinite period of time, but in no case for fewer than three years.

The organizations, acting on behalf of the insurance agents, brokers and companies they represent, filed an administrative challenge and a civil court challenge to stop the permanent rule recently adopted by Kreidler.

Claire Howard, APCIA senior vice president, general counsel and corporate secretary, in a statement argued the commissioner’s “extreme action exceeds his authority” and bypasses the state legislature.

“Commissioner Kreidler’s rule to prohibit insurers use of credit-based insurance scores will continue to throw the Washington insurance market into chaos and raise rates for over one million consumers,” Howard said. “This permanent rule is particularly harmful to seniors on fixed incomes and those struggling to economically recover from the COVID pandemic.”

The statement continues: “APCIA, PIA, and the IIABW are pursing these additional legal actions for several reasons, to include redressing an abuse of authority, preserving the legislative prerogative to enact statutes, and the public’s right to count on statutes enacted by the Legislature to be faithfully executed by the executive branch of government.”

Kreidler’s office has been reached out to for comment.

Kreidler is also proposing a new “transparency rule” requiring insurers to provide policyholders with a written explanation for any premium change.

“I’m taking this action against insurers’ use of credit scoring in response to the economic harm many people have experienced during the COVID-19 pandemic—harm that has significantly impacted people who are already financially vulnerable,” Kreidler said in a statement. “We know that now, more than ever, credit reporting is unreliable. It is unfair to base how much someone pays for frequently mandatory insurance on an unreliable and fluctuating factor like a credit score.”

Kreidler asked insurers to provide additional information, including:

• A histogram that shows the range of premium changes due to removing credit information as rating factor. Some insurers already provided these illustrations as part of their rate filings.

• Copies of any communications insurers used to describe the new credit rule to their policyholders.

Only 12 companies representing 5.2 percent of the affected market provided the information Kreidler requested.