02/26/2018 09:00 AM Senate FINANCE

HOUSE BILL NO. 195                                                                                                            
                                                                                                                                
     "An  Act relating  to insurer  actions based  on credit                                                                    
     history  and  insurance   scores  at  insurance  policy                                                                    
     renewal;  and providing  for  insurer consideration  of                                                                    
     consumer requests  for exceptions of credit  history or                                                                    
     insurance scores."                                                                                                         
                                                                                                                                
9:03:29 AM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  directed  attention   to  HB  195.  She                                                                    
relayed that  the bill  had been heard  in committee  on the                                                                    
previous Wednesday and heard public testimony.                                                                                  
                                                                                                                                
LORI   WING-HEIER,   DIRECTOR,    DIVISION   OF   INSURANCE,                                                                    
DEPARTMENT OF COMMERCE,  COMMUNITY AND ECONOMIC DEVELOPMENT,                                                                    
stated  that  HB  195  amended  credit  scoring,  which  was                                                                    
currently allowed in the state  on new business for personal                                                                    
lines for  auto and homeowners.  She stated that it  did not                                                                    
impact  life  insurance,  health  insurance,  or  commercial                                                                    
lines. The  bills allowed credit  scoring to be used  on the                                                                    
renewal  and new  business. It  allowed for  the insurer  to                                                                    
provide  to the  consumer with  written notice,  when credit                                                                    
scoring was  used, and whether  an adverse action  was found                                                                    
that would  be detrimental to  the consumer. At  that point,                                                                    
the insurer  must tell the  consumer that there was  a right                                                                    
for an  appeal. The appeal  would go for  extraordinary life                                                                    
circumstances,  which  were spelled  out  in  the bill.  The                                                                    
consumer would  appeal to the  insurance company  first, and                                                                    
the second  appeal would come  to the Division  of Insurance                                                                    
for adjudication.                                                                                                               
                                                                                                                                
Senator Olson  wondered why the  amendment was  not included                                                                    
in the original credit score bill.                                                                                              
                                                                                                                                
Ms.  Wing-Heier  replied  that  the  bill  allowed  for  the                                                                    
insurance  company  to  be  the  final  adjudicator  of  the                                                                    
appeal.  It did  not  allow  extraordinary circumstances  to                                                                    
include  the  provision related  to  a  prudent person.  The                                                                    
governor  did not  feel that  the consumer  protections were                                                                    
broad enough, so he vetoed  the bill, and reintroduced it in                                                                    
2017. She did not know why  the drafters did not include the                                                                    
broader protections in 2016.                                                                                                    
                                                                                                                                
9:06:25 AM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon   referenced  a  question   from  public                                                                    
testimony   on  February   21,  2017   that  concerned   the                                                                    
definition of a  "new applicant." She wanted  to ensure that                                                                    
all applicants could  use their credit score  to help reduce                                                                    
their premium.                                                                                                                  
                                                                                                                                
Ms. Wing-Heier replied that the  Division of Insurance would                                                                    
not  mandate that  insurance companies  use credit  scoring.                                                                    
Rather, if the  company elected to use  credit scoring, they                                                                    
would use it on new  business and renewal. She remarked that                                                                    
Geico did not currently use credit scoring.                                                                                     
                                                                                                                                
Co-Chair  MacKinnon  asserted  that  the  renewal  would  be                                                                    
included.                                                                                                                       
                                                                                                                                
Ms. Wing-Heier answered in the affirmative.                                                                                     
                                                                                                                                
Senator  Stevens wondered  whether  there was  proof that  a                                                                    
person  with a  low credit  rating was  more likely  to have                                                                    
accidents.                                                                                                                      
                                                                                                                                
Ms.  Wing-Heier   replied  that  the  statistics   from  the                                                                    
National Association  of Insurance Commissioners  (NAIC) and                                                                    
other organizations  showed a correlation to  credit period,                                                                    
and  the   actions  an  individual   would  take,   such  as                                                                    
maintaining their  house, good  health, and  driving record.                                                                    
The  credit  score would  become  a  part of  the  insurance                                                                    
score.                                                                                                                          
                                                                                                                                
Co-Chair  MacKinnon  asked  Ms. Wing-Heier  to  discuss  the                                                                    
issue of families with no credit.                                                                                               
                                                                                                                                
Ms. Wing-Heier stated  that if an individual  had no credit,                                                                    
the individual would not be penalized.                                                                                          
                                                                                                                                
Senator Olson had a hard  time drawing a distinction between                                                                    
not being put into a higher category.                                                                                           
                                                                                                                                
Ms.  Wing-Heier  stated  that  if  the  insurers  could  not                                                                    
determine  a credit  score, an  induvial would  not be  in a                                                                    
preferred program.                                                                                                              
                                                                                                                                
Co-Chair  MacKinnon  relayed  that  the  original  bill  had                                                                    
passed  with overwhelming  support before  it was  vetoed by                                                                    
the governor.                                                                                                                   
                                                                                                                                
Vice-Chair  Bishop  discussed  FN1 from  the  Department  of                                                                    
Commerce,  Community and  Economic  Development. He  relayed                                                                    
that the committee had covered the fiscal note.                                                                                 
                                                                                                                                
Vice-Chair Bishop  MOVED to report  HB 195 out  of Committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
HB  195 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation  and  with  one  new zero  fiscal  note  from                                                                    
Department of Commerce, Community and Economic Development.                                                                     
                                                                                                                                
9:12:39 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:17:38 AM                                                                                                                    
RECONVENED