Washington Insurance Commissioner Mike Kreidler has proposed modifying the state’s recently adopted premium change transparency rule.

The proposal is specific to Phase 2 of the rule (the automatic inclusion of reasons for premium increases in policy renewals). It moves the timing of that action from June 2027 to June 2029.

Phase 1, which went into effect in June, requires insurance companies to disclose to policyholders why their premiums had gone up when asked by the consumer.

The current premium change transparency rule covers auto and homeowner insurance policies. The Office of the Insurance Commissioner held meetings to gather input from consumers and the insurance industry prior to finalizing the rule.

Phase 1 (effective now) mandates include:

• Insurance companies must include a disclaimer on the first page or view of renewal notices or billing statements that lets the policyholder know they can request more details about their premium increase.
• The notices must be in 12-point bold font and must include contact information.
• The insurance company then has 20 days from receiving a written request to deliver a clear, concise statement in writing providing a reasonable explanation for the premium increase.

Phase 2:

• Starting June 1, 2029, insurers must send a notice at least 20 days before renewing a policy with a 10% or more increase.
• The requirements for explanations get more specific in Phase 2: Insurance companies must provide a clear explanation and include the primary factors that caused the increase.
• Those factors can include claims history, discounts, fees and surcharges, premium capping, base rate changes, and demographic factors — like the policyholder’s age, credit history, education, gender, marital status and occupation.
• For auto insurance, factors can also include the vehicle’s garaging location, driving record, miles driven, the number of drivers and the number of vehicles on the policy.
• For homeowners insurance, factors can also include the property’s age, location, and value.

Topics
Auto
Washington
Homeowners