A bill to simplify insurance policy renewal on Thursday cleared the Senate by a large margin.

It’s Gov. Bill Walker’s bill and it allows insurance companies to use a person’s credit history for policy renewals.

The bill is directed mostly at auto and home insurance renewals. Under current law, companies must get a waiver for those renewing but not for new policyholders.

The House unanimously passed the bill last year but the Senate didn’t provide the same approval stamp.

The bill received just over an hour of debate before passing, 13 to 4 with most of the House Democrats pushing back.

“So who will be affected by this bill?” Bill Wielechowski (D-Anchorage) said. “What the studies have found is that people with lower incomes have lower credit scores. The people who can least afford to pay more will be forced to pay more for the privilege of driving a car or getting a mortgage in this state.”

Senate Majority Leader Peter Micciche (R-Soldotna) said the bill simply removes some bureaucracy; otherwise, nothing changes.

“When we hear about all of the thousands of Alaskans, the ones that are benefitting are benefitting today,” he said. “The ones that are getting less of a discount are getting less of a discount today.”

Two years ago, Walker vetoed a similar bill by former senator Charlie Huggins (R-Wasilla) because the governor believed it lacked consumer protections.

One of those protections prevents insurers from denying coverage based on the absence of a credit history or the ability to determine the history.

“The credit score has to be a part,” said Lori Wing-Heier, Alaska’s director of insurance. “It cannot be the sole reason an insurance company elects to either not provide you coverage, cancels you or will not renew you. It has to be a part of it but it cannot be the sole reason.”

Wielechowski offered an amendment that would have essentially gutted the bill and prohibited insurers from using consumer’s credit history.

The bill’s next stop is Walker’s desk for his signature.

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