Explanation of emergency order issued by the insurance department of Washington restricting the use of credit scoring.
April 08, 2021 at 01:30 PM
Thank you for sharing!
Your article was successfully shared with the contacts you provided.
March 23, 2021 – The Washington Insurance Commissioner Mike Kreidler has issued an emergency order temporarily prohibiting the use of credit history in determining premiums and eligibility for private automobile, homeowners, and renter’s insurance policies. The commissioner has taken this step in light of the coronavirus pandemic and the financial effect it has had on consumers who may have lost income due to state mandated closings. The governor has issued several emergency proclamations restricting state agencies from charging late fees and penalties for a variety of debts.
The parameters of the CARES Act is such that the information credit bureaus are collecting is inaccurate for some consumers, and is therefore unreliable and a predictive tool for insurers. The commissioner finds that these protections have disrupted the credit reporting process, having negative consequences disproportionately for people of color. When the CARES Act expires a large volume of negative credit corrections will flood consumer’s credit histories, and this factor has not been accounted for in current credit scoring models. This would make using existing models of credit scoring unfairly discriminatory under certain statutes.
This premium content is locked for
FC&S Expert Coverage Interpretation subscribers.
Request a Free Trial today to enjoy unlimited access to the trusted solution for successful interpretation and analyses of complex insurance policies.
Trusted, quality content from industry experts with over 60 years insurance experience, combined
Customizable alerts of changes in relevant policies and trends
Search and navigate Q&As to find answers to your specific questions
Filter by article, discussion, analysis and more to find the exact information you’re looking for
Continually updated to bring you the latest reports, trending topics, and coverage analysis
Already have an account? Sign In Now
For enterprise-wide or corporate access, please contact our Sales Department at 1-800-543-0874 or email [email protected].
Get Answers Directly From the FC&S Experts
Submit your coverage interpretation question to the editors of FC&S for quick and reliable information.
Certain legal products require the grower/seller to have a license in order to grow, store and sell the product. Once an individual's license expires, that individual may find themselves in violation of state laws, and may experience serious consequences.