Washington Administrative Code › Title 284 - Insurance Commissioner, Office of the › Chapter 284-24A - Rules that apply to insurers that use credit history for personal insurance underwriting or rating › Section 284-24A-065 - Questions and answers

Current through Register Vol. 24-14, July 15, 2024
(1)
Our insurance company uses insurance scoring bands (a range of scores) to
			 determine what to charge a consumer based on their personal insurance score.
			 Does an insurer have to file its insurance scoring bands?
Yes. If an
			 insurer uses insurance scoring bands for rating purposes, the insurer must file
			 them (and any future changes to those bands). The bands are part of the rating
			 plan and must be supported by actuarial analysis.
(2)
What types of data can an insurer
			 use to support a credit-based rating plan?
A credit-based rating plan
			 must be based on the experience of the insurer, an affiliated insurer under the
			 same management, or a licensed rating organization. The commissioner will
			 accept data from other states where comparable credit-based rating plans are in
			 effect.
(3)
The law says an
			 insurer cannot use the number of credit inquiries to set rates or to deny
			 insurance. Can an insurer consider the amount of time since the most recent
			 inquiry?
Yes. The law prohibits an insurer from considering the number
			 of credit-seeking or promotional inquiries. It does not prohibit an insurer
			 from considering the length of time since the most recent inquiry about a
			 consumer's credit rating.
(4)
The law says an insurer cannot use collections identified with a medical
			 industry code to set rates or to deny insurance. Not all credit vendors provide
			 industry codes for collection accounts. If a vendor searches for medical
			 references in a text field, would that action comply with the law?
Yes.
			 Collections identified with a medical industry code cannot be used. If medical
			 history is not coded or identified, insurers and vendors are not required to
			 perform additional research.
(5)
The law says an insurer cannot use the initial purchase or finance of a
			 vehicle or house that adds a new loan to the consumer's existing credit history
			 to set rates or to deny insurance. Can my company use the number of such loans
			 and/or the outstanding balance of such loans?
An insurer may not use the initial purchase of a home or
				vehicle to affect eligibility for insurance or insurance premiums. The initial
				purchase is the first loan taken out to buy a home or vehicle.
An insurer may evaluate any subsequent borrowing by a
				consumer.
A method an insurer or vendor can use to comply with the law is
				to eliminate vehicle and home loans from the consumer's debt load
				calculation.
(6)
The
			 law says an insurer cannot use the total available line of credit to set rates
			 or to deny insurance.
Can my company use number of credit lines
			 with limits over a set amount?
The law prohibits use of data related to the consumer's total
				available line of credit. Any attribute that evaluates the total amount of
				credit available to a consumer is prohibited.
Your insurer may use the debt/credit ratio or other ratios that
				consider the actual debt load.
Statutory Authority:
				  RCW
				  48.02.060,
				  48.18.545,
				  48.19.035, and
				  48.30.010. 05-02-026 (Matter No. R
				  2004-01), §
										284-24A-065, filed 12/29/04,
				  effective 7/1/05. Statutory Authority:
				  RCW
				   48.02.060,
				  48.18.100,
				  48.18.120,
				  48.19.080,
				  48.19.370,
				  48.30.010,
				  49.60.178,
				  48.18.545(7),
				  48.19.035(5).
				  02-19-013 (Matter No. R 2001-11), §
										284-24A-065, filed 9/6/02,
				  effective 10/7/02.