Opinion ID: 2518552
Heading Depth: 4
Heading Rank: 1

Heading: The plain language of AS 21.36.460(d)(1) prohibits Progressive's proposal.

Text: Progressive argues that underwriting, by definition, requires an affirmative action. Progressive contends that because it is proposing to merely maintain a consumer's status in the same underwriting credit tier or rate classification, Progressive would not be taking an affirmative action and thus not again underwriting or rating. The division responds by arguing that there is no way to use credit scoring (or any other rating or eligibility factor) at renewal other than for underwriting or rating. This is proved, the division argues, by Progressive's concession that consumers' rates will be impacted if Progressive removes their credit scores at renewal. Using our independent judgment, we interpret Alaska Statutes according to reason, practicality, and common sense, taking into account the plain meaning and purpose of the law as well as the intent of the drafters. [9] Words that have not acquired a peculiar meaning, by virtue of statutory definition or judicial construction, are to be construed in accordance with their common usage. [10] Alaska Statute 21.36.460 does not define the terms again underwrite or again rate, and the parties do not cite any cases in which we have defined those terms. Underwrite, however, is a verb with two common meanings, depending on the context in which it is used. Thus, underwriting has been defined as the process by which an insurer decides whether, and at what price, the insurer will accept a given risk. [11] Under this first definition, the Federal Trade Commission (FTC) has explained the scope of underwriting as follows: An insurer may obtain a consumer report to decide whether or not to issue a policy to the consumer, the amount and terms of coverage, the duration of the policy, the rates or fees charged, or whether or not to renew . . . a policy, because these are all underwriting decisions.[ [12] ] Second, underwrite means to write one's signature at the end of (an insurance policy), thus assuming liability in the event of a specified loss or damage. [13] Given the context in which the terms underwrite and underwriting exist in AS 21.36.460(d)(1), we interpret those terms to refer to the process by which an insurer measures a consumer's risk level to decide whether, and at what price, the insurer will accept the risk of loss posed by that consumer. In context, the phrase again underwrite or rate at renewal therefore refers to the process by which an insurer re-evaluates a consumer's risk level in deciding whether or not to renew that consumer's policy and, if so, at what rate. This definition was confirmed by an expert witness, who stated in an affidavit submitted by Progressive, that the term underwrite refers to the function of securing and evaluating information, and making decisions to accept or reject risks. Progressive argues that it would not be again underwriting at renewal because, it asserts, it would not be taking an affirmative action; it would be merely maintain[ing] an insured's status in the same credit underwriting tier or rate classification. This argument, however, overlooks a fundamental question: For what purpose would Progressive maintain a consumer's credit tier if not for underwriting? An insurer's decision to offer a consumer the option to renew her policy is, by definition, an underwriting decision. [14] It is a decision that necessarily implies that the insurer has analyzed the consumer's risk of loss and found it to be acceptable. Under its proposal, even if Progressive offers to renew a consumer's policy at the same rate and underwriting risk group, it will have done so only after considering the consumer's frozen credit tier as a factor in its renewal decision. This process violates AS 21.36.460(d)(1) because it falls within the plain meaning of again underwriting or rating at renewal based in part on a consumer's credit history.