Sources have confirmed to HA that Safeco Insurance is indeed the unnamed “Firm 1″ in a Washington Insurance Commissioner’s Office study of the abusive use of credit scoring to cancel auto-insurance policies. As first reported in the Seattle Times, Safeco has asked the Thurston County Superior Court to block release of the information.
According to sources familiar with the investigation, the controversial practice was initially pioneered in WA state by Progressive Insurance. Sources say that Safeco was actually late to embrace the practice, but did so aggressively under former CEO Mike!™ McGavick’s leadership, far and quickly exceeding the scope and impact of its competition. As the Times initially reported:
The study cited “Firm 1″ for relying on credit scoring to cancel auto policies, as opposed to simply raising rates, which the other companies did. It said Firm 1’s decisions disproportionately impacted minorities, divorced women and low-income residents.
Many of those terminated by Firm 1 had clean driving records.
“Over one-quarter of those cancelled for low credit scores” by Firm 1 “had no ‘incidents’ in the insurer’s records, though some had been with the insurer for more than 10 years,” the 2003 study said.
“Seventeen percent of apparently accident-free cancelled policyholders were minorities.”
When the story first broke Monday I thought it would be easy to find a cooperative source inside an office Democrats have held for years, but extracting relevant information turned out to be harder than squeezing blood from a stone. Commissioner Mike Kreidler has called credit scoring “a form of redlining” and thinks it “should have been banned,” yet he has adamantly refused to disclose the identity of the firms in question until the legal issues are resolved.
This has apparently led to much consternation in and outside his office by those who complain that Kreidler is not doing enough to help fellow Democrats. But while I personally wouldn’t mind if Kreidler were a bit more partisan, I fully admire the respect he has shown for his office, and am somewhat reminded of similar complaints from GOP stalwarts who attacked Secretary of State Sam Reed for not doing more to help fellow Republican Dino Rossi come out on top of our excruciatingly close 2004 gubernatorial election.
Still, this was a study conducted by a public agency, paid for with taxpayer dollars, and so the public has a right to know its details. Thus if you are one of those Insurance Office insiders who think Kreidler should be more partisan, I urge you to act on your convictions and please leak me any relevant documents. I promise to maintain your anonymity, and once again affirm my pledge to go to jail before ever revealing a source.