Committee hears bill to require insurers to explain renewal premium increases to consumers

The Senate Committee on Labor and Business held a public hearing on House Bill 2563A on May 15, 2025, to consider a measure requiring insurers to give consumers a clear, written explanation for any premium increase at policy renewal upon request.

Alex Chang, deputy administrator for the Division of Financial Regulation, said HB 2563A responds to frequent consumer complaints that insurers provide inadequate explanation for rate increases. “There’s no current provision in the insurance code that requires an explanation of why,” Chang said, and the department shared an example renewal notice that listed only a generic factor such as “driving record” without specifics.

Jesse O’Brien, policy manager with the Division of Financial Regulation, told the committee the bill applies to personal auto and homeowners policies and to renewals on or after Sept. 1, 2026. On written request, an insurer would have 20 days to respond with a notice listing up to four factors that significantly contributed to the premium increase. The bill requires a consumer-friendly request process and authorizes rulemaking to define factors and data collection. O’Brien said the current amended bill is the product of extended negotiation with insurers and producers and that no organized opposition was known at the time of the hearing.

Kenton Bridal, president of the Northwest Insurance Council, said the industry appreciates the department’s work and confirmed the council’s neutral position, noting the need for a robust rulemaking process to clarify implementation.

The committee closed the public hearing. Stakeholders indicated they expect rulemaking to flesh out definitions, limits, exemptions and the operational process for requests and responses.