The American Property Casualty Insurance Association has filed a lawsuit against the Washington state insurance regulator after he issued an administrative ban on insurance companies using credit scores to underwrite policies.

The office of Commissioner Mike Kreidler defended the action as a means to protect insurance consumers from a practice it called "inherently unfair." Kreidler has repeatedly backed proposals to do away with the use of credit scores as a rating factor when determining the relative risk of current or prospective policyholders and how much insurers should charge for coverage.

After a bill in the Washington legislature that would prohibit using customers' credit history when underwriting policies stalled in the Senate, Kreidler on March 22 issued an emergency order banning the practice when underwriting private renters, homeowners and auto policies.

The APCIA sharply criticized the move in a release announcing its legal action, calling Kreidler's order an "extreme" intervention and "abuse of authority" that will likely raise rates for more than 1 million consumers in the state. Most consumers save money when insurers use credit to write policies, Claire Howard, the association's senior vice president and general counsel, said in a statement.

"Insurance scores are not credit scores like the ones used by banks to offer loans or credit cards," Howard said. "Insurers use specific information about how consumers use credit as one factor to give consumers the most affordable and accurate rate."

Kreidler's office said insurance industry executives are unwilling to go on the record to defend the use of certain rating factors that "they continually claim is a benefit for consumers despite all evidence to the contrary."

"Instead, they hide behind their associations," spokesperson Stephanie Marquis said in an email to S&P Global Market Intelligence. The office is reviewing the claims in the APCIA's lawsuit and looked forward to responding to them in court, Marquis wrote.