State, Department of Commerce, Community & Economic Development, Division of Insurance v. Progressive Casualty Insurance Co.

Summary

The Alaska Supreme Court held that Progressive's proposal to use consumers' frozen credit scores when renewing personal insurance policies violated Alaska Statute 21.36.460(d)(1). The court also held that the statute was not preempted by the federal Fair Credit Reporting Act. The court reversed the superior court and remanded for reinstatement of the Alaska Division of Insurance's order.

Holdings

1. An insurer's use of a consumer's frozen credit tier in deciding whether to renew a personal insurance policy and at what rate constitutes again underwriting or rating at renewal based in part on the consumer's credit history. Progressive's proposal therefore violated Alaska Statute 21.36.460(d)(1), unless the consumer waived the statutory prohibition at that renewal.
2. Alaska Statute 21.36.460(d)(1) is not preempted by the Fair Credit Reporting Act. The state law requires consumer consent before an insurer may use credit at renewal, but does not conflict with or obstruct the purposes of the federal statute.

Questions Presented

1. Whether Progressive's proposal to use consumers' frozen credit scores at policy renewal constituted again underwriting or rating based in whole or in part on credit history in violation of Alaska Statute 21.36.460(d)(1).
2. Whether Alaska Statute 21.36.460(d)(1) was preempted by the federal Fair Credit Reporting Act.

Disposition

reversed_and_remanded