Bill
SB 5589
WA OIC will study how credit history and credit-based scoring affect personal insurance pricing and access, assess disparities, and propose policy options or alternatives.
Purpose and intent
- SB 5589 directs the Office of the Insurance Commissioner (OIC) to study how insurers’ use of credit history, credit-based insurance scoring, and other rate factors may disparately impact Washington residents.
- The goal is to inform public policy on personal insurance pricing, availability, and fairness by evaluating current practices and exploring alternatives.
Key provisions
- New section creating a study framework:
- The OIC must study insurers’ use of credit history, credit-based insurance scores, and other rate factors that may have disparate impacts on residents in determining personal insurance premiums, rates, and eligibility.
- The study will consider consumer costs and insurance availability.
- Information collection and analysis:
- The OIC shall collect information from entities transacting personal insurance (as defined in RCW 48.19.035) and any other relevant information.
- The OIC may contract with actuaries and other consultants.
- Tasks for contracted experts include:
- Analyzing how credit history, credit-based scoring, or other factors affect people of various races, ethnicities, sexes, socioeconomic statuses, and national origins.
- Identifying alternative rate factors not reliant on credit or that avoid disparate impacts.
- Assessing the likely effects of using or not using these factors and the alternatives on costs, rates, eligibility, and availability across demographic groups.
- Developing policy options for legislative consideration, including use of rate plans that include or exclude credit history, scoring, or other disparately impactful factors.
- Reporting timeline:
- Preliminary report to relevant legislative policy committees by December 31, 2025.
- Final report by September 15, 2026, including findings, policy options, and recommendations on allowance, prohibition, or contingent use of credit history, credit-based scoring, and alternatives.
- Confidentiality and open records:
- Data provided to the OIC and contracted consultants for this study is confidential and privileged.
- Public disclosure is not allowed for the non-aggregated data; aggregated data may be published and is considered open records.
- The OIC’s authority under existing statutes remains intact.
- Expiration:
- The act expires December 31, 2033.
Affected parties and scope
- Primary authority: Washington Office of the Insurance Commissioner.
- Insurers and entities that transact personal insurance (auto, homeowners, renters, etc.) in Washington, as defined by RCW 48.19.035, will be required to provide information.
- The study targets the potential disparate impacts of credit history, credit-based insurance scores, and other rating factors on diverse populations (race, ethnicity, sex, socioeconomic status, national origin).
Procedural status and timeline
- Introduced January 30, 2025.
- First reading and referral to the Senate Committee on Business, Financial Services & Trade.
- Passed the committee and moved through Rules and readings, with multiple actions in early 2025.
- As of April 27, 2025: By resolution, returned to Senate Rules Committee for third reading.
- Finalizing status: Pending third reading and potential passage by the Senate; the bill includes a sunset/expiration date in 2033.
Potential impact
- If adopted, the study could influence legislative decisions on whether to allow, restrict, or conditionally permit the use of credit history, credit-based scoring, and other factors in personal insurance pricing.
- Could lead to policy options that shift pricing practices toward more equitable alternatives and improve transparency around how rates are determined.
- Results may affect consumer costs, eligibility, and availability of personal insurance for various demographic groups, depending on recommended changes.
Compiled from official sources — confirm details with the bill’s official record.
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