October 31, 2024
OLYMPIA, Wash. — Washington state Insurance Commissioner Mike Kreidler is considering a change to the state’s recently adopted premium change transparency rule.
The change would be specific to Phase 2 of the rule — the automatic inclusion of reasons for premium increases in policy renewals — and would move the timing of that action from June 2027 to June 2029.
Phase 1, which went into effect this June, requires insurance companies to disclose to policyholders why their premiums had gone up when asked by the consumer.
“This transparency rule is important to consumers and insurers alike and is helping people get clear answers about why they are paying what they pay for insurance,” Kreidler said. “Moving the Phase 2 timing allows us to collect more data on Phase 1 and work with industry to better understand the technical and administrative impacts of implementing Phase 2.”
Kreidler added that his office will be initiating a data call with insurance companies as part of the Phase 1 assessment.
The current premium change transparency rule covers auto and homeowner insurance policies for people in Washington. The Office of the Insurance Commissioner held five interested-party meetings to gather input from consumers and the insurance industry prior to finalizing the rule. The rule is the first of its kind in the country.
During Phase 1 (effective now):
- 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.
- These 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 (through the mail or email) to deliver a clear, concise statement, in writing, providing a reasonable explanation for the premium increase.
During Phase 2 (effective June 2027):
- Starting June 1, 2027, insurance companies 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 homeowner insurance, factors can also include the property’s age, location, and value.
If you have received a recent rate increase and have questions for your insurer, send a message to your insurance company using the contact information on your renewal notice or billing statement. Visit OIC’s Premium Increase Transparency page for more information.