February 20, 2025

OLYMPIA, Wash. — A senate bill proposing a study of the impact of rating factors, including credit history passed out of committee in the Washington State Senate on Thursday.

Senate Bill 5589, proposed by Washington State Insurance Commissioner Patty Kuderer and sponsored by Sen. Bob Hasegawa (D – Seattle), requires Kuderer’s office to conduct a study on how insurance companies use credit history, credit-based insurance scores and other rate factors that may have disparate impacts on Washington residents. The study would also explore alternatives to credit scoring that companies could use in determining premiums.

“Insurers are relying more and more on algorithms and big data to determine someone’s premium and if they will even insure someone,” Kuderer said. “They claim it helps them predict who will file a claim and that may be true. But as the regulator, it’s my duty to ensure that insurers’ behavior is not discriminatory. Until we have concrete data from the Washington state market, we won’t be certain.” 

Insurance companies doing business in Washington state can use a person’s credit history to set premiums for personal lines of insurance, like home, auto, liability and theft coverage. State law requires all rates and rating plans used in Washington be approved by Kuderer’s office before they’re used. 

State law also states insurance rates must not be excessive, inadequate or unfairly discriminatory.

The bill requires a preliminary report to be delivered to the Legislature by December 31, 2025.