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