Insurers have welcomed Insurance Commissioner Mike Kreidler’s (pictured) proposal to delay the implementation of Phase 2 of the premium change transparency rule in Washington state.
Originally slated for a June 2027 rollout, the second phase of the rule is now likely to come into effect in June 2029 instead. The first phase is already in force, having gone live in June this year.
Kreidler declared: “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.
“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.”
Under Phase 2, insurance companies will be mandated to provide a clear explanation for premium increases, citing the primary factors behind the price hike. Under the already-in-place Phase 1, policyholders are informed that they can request more details about their premium increase.
In response to the proposed timeline adjustment, the American Property Casualty Insurance Association, the National Association of Mutual Insurance Companies, and the North West Insurance Council said in a joint statement:
“Phase 2 requires insurance companies to provide much more granular, individualized, factor-by-factor premium breakdowns, including percentages or dollar amounts, to any policyholder whose premium has increased by 10% or more at renewal – regardless of whether the consumer has asked for that information and regardless of whether any of the information provided will help the consumer make any changes to reduce the cost of their insurance.
“The cost to insurers to comply with Phase 2 could reach tens of millions, or even hundreds of millions of dollars – at a time when insurance costs are climbing dramatically due to natural disasters, storm activity, more traffic crashes, injuries and deaths, rising home construction prices, and auto repair costs.”
The organizations added: “Insurers believe Phase 1 of the Commissioner’s premium transparency rule empowers consumers with sufficient, actionable information that can help them make smart choices about the coverage and cost that come with their insurance.
“It makes sense that the Commissioner now seeks to gather information from insurers and policyholders about the impact and effectiveness of Phase One before deciding whether to move forward with Phase Two (and, if so, how to make it work better for consumers and insurers alike).”
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