WA Insurance Transparency Rule   

 

We can all agree, we’d appreciate more transparency when it comes to the services we spend our money on, especially our auto and home insurance! It better allows us to understand the “WHY”, so that we can make more informed decisions in the future. Transparency, meet insurance!

Background

Over the years, the OIC (the Office of the Insurance Commissioner) has received numerous complaints that customers haven’t been able to get a clear answer as what factors are affecting their insurance bill. Haven’t you ever would why exactly your insurance bill went, especially if you might not have had a recent accident or claim? You’re not alone!

So, What Is This Rule?

The Washington state Office of the Insurance Commissioner (OIC) recently announced an update to its transparency rules that will increase accountability and protect consumers. The new rule, known as the OIC Transparency Rule, requires insurance companies to disclose more information about their rates, coverage, and business practices.

One of the key components of the Transparency Rule is that insurance companies are now required to provide detailed explanations of how they calculate their rates. This includes information about the factors they consider when setting premiums, such as age, gender, location, and claims history. By providing this information, consumers will have a better understanding of why their rates are what they are and will be able to make more informed decisions when shopping for insurance.

Another important aspect of the Transparency Rule is that insurance companies must now make their coverage policies more accessible to consumers. This includes providing clear, easy-to-understand explanations of what is covered and what is excluded from their policies. This will help consumers avoid surprises and make sure they are getting the coverage they need.

Additionally, the Transparency Rule requires insurance companies to disclose any conflicts of interest that may arise in their business practices. This includes relationships with affiliated companies or third-party vendors that may influence the products and services they offer. By being transparent about these potential conflicts, consumers can make better-informed decisions about which insurance company to choose.

You can find more information about the Transparency Rule here.

Implementation 

The first phase begins June 1, 2024, and applies to policies renewed on or after June 1, 2024. Requirements at this phase include:

• Insurers providing a prominent disclaimer (12-point type bold font) on the first page or view of renewal notices and renewal billing statements notifying insureds they can request, in writing, an explanation for any increases in their premium(s).
• A reasonable explanation in writing from the insurer is also required when policyholders send a written request for an explanation of the premium increase.
• Responses are due to policyholders no later than 20 calendar days from receipt of the written request.

Forecast

Overall, the new OIC Transparency Rule is a positive step towards increasing accountability and protecting consumers in the insurance industry. By requiring companies to be more transparent about their rates, coverage, and business practices, the rule will empower consumers to make better decisions when it comes to purchasing insurance.

If you’re looking for a fresh and engaging insurance experience, visit the group at Northtown Insurance for all your insurance questions and needs!

Fine Print: This is a general overview with the intention of bringing awareness to coverage options and general industry standards. Coverage varies between carriers and states. Check your policy for specifics.