Prohibits motor vehicle insurers from discrimination on the basis of socioeconomic factors in determining algorithms used to construct actuarial tables, coverage terms, premiums and/or rates.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A843A
SPONSOR: Peoples-Stokes TITLE OF BILL:
An act to amend the insurance law, in relation to prohibiting motor
vehicle insurers from discriminating based on socioeconomic factors
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to prohibit motor vehicle insurers from
discrimination on the basis of socioeconomic factors in determining
algorithms used to construct actuarial tables, coverage terms, premiums
and or rates.
SUMMARY OF PROVISIONS:
This bill will amend Insurance Law, adding a new § 2618, to prohibit the
use of: (a) sex; (b) marital status; (c) sexual orientation; (d) age;
(e) consumer credit information or credit score; (f) any measure of a
consumer's price elasticity of demand; (g) employment status or occupa-
tion; (h) income level; (i) educational background or education level
attained; (j) ownership or interest in real property; (k) any other
characteristic indicating or tending to indicate the socioeconomic
status of an individual in any classification plans, rules or rates,
rating plans, or Modifications issued by any insurer or insurance compa-
ny group. Additionally, under this section, "sex" shall include gender
identity or expression, and transgender status, as the term "gender
identity or expression" is defined in section two hundred ninety-two of
the Executive Law.
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):
The amended version clarifies that the term "sex" shall include gender
identity or expression, and transgender status, as defined in the Execu-
tive Law.
JUSTIFICATION:
In order to comply with New York State law a person operating a car must
have limited liability auto insurance. Currently, auto insurers doing
business may use any range of factors to determine premiums which leads
to adverse treatment of low-to moderate-income drivers. In the State of
New York, insurance companies are using factors other than a driver's
experience and driving record to calculate a drivers' premium.
Insurers use a wide range of socioeconomic and non-driving factors to
determine a driver's premium. Insurers use credit scores, occupation,
level of educational attainment, marital status, and homeownership in
addition to already prohibited factors such as age and sex. Some insur-
ance companies even use consumer data to determine whether a customer is
likely to shop around, and then sets prices for its policies according-
ly.
Using socioeconomic and non-driving factors that are not inherently
related to a person's ability to operate a car, safely, forces good
drivers who are of lower socioeconomic status to pay more for our
State's obligatory auto insurance. By using rating factors such as
these, good drivers of lower socioeconomic status are not treated equal-
ly in the auto insurance marketplace.
The Western New York Law Center, among other state and national organ-
izations, has conducted research looking into the impact of socioeconom-
ic factors on auto insurance premiums for New York Drivers. The Western
New York Law Center recently did a study that examined over 5,000 rate
quotes for drivers in Western New York. They found that a woman with a
lower socioeconomic status pays as much as 22 7.11% more for limited
liability auto insurance than a driver with the same driving record and
a high socioeconomic status. A man with a lower socioeconomic status is
charged 174.26% more for limited liability auto insurance than a driver
with the same driving record and a high socioeconomic status. Simply
put, when all driving related factors are held constant, drivers with
lower levels of education, occupational status, marital status, and
renters all pay between 1.74 to 2.27 times as much for auto insurance as
their higher status peers.
It is time to stop allowing these rating practices which aid in perpet-
uating the cycle of poverty.
PRIOR LEGISLATIVE HISTORY:
A8606 of 2015/2016
A2849 of 2017/2018
A7040 of 2019/2020
A3082 of 2021/2022
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
EFFECTIVE DATE:
IMMEDIATELY.
STATE OF NEW YORK
________________________________________________________________________
843--A
2023-2024 Regular Sessions
IN ASSEMBLY
January 11, 2023
___________
Introduced by M. of A. PEOPLES-STOKES, STECK, MAMDANI, WALLACE, SIMON,
PAULIN, KELLES, HYNDMAN, ALVAREZ, LUNSFORD, ANDERSON, SEAWRIGHT --
read once and referred to the Committee on Insurance -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
AN ACT to amend the insurance law, in relation to prohibiting motor
vehicle insurers from discriminating based on socioeconomic factors
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The insurance law is amended by adding a new section 2618
2 to read as follows:
3 § 2618. Rating factors prohibited. (a) Any insurer or insurance compa-
4 ny group doing business in the state as a motor vehicle insurer may not
5 use classification plans, rules or rates, rating plans or modifications
6 of any of the foregoing, based in whole or in part on the factors speci-
7 fied in this section. Any classification plans, rules or rates, rating
8 plans or modifications issued by said insurer or insurance company group
9 using the following factors in whole or in part shall be deemed to
10 violate public policy and are subject to disapproval by the superinten-
11 dent:
12 (1) age;
13 (2) marital status;
14 (3) sex;
15 (4) sexual orientation;
16 (5) educational background or education level attained;
17 (6) employment status or occupation;
18 (7) income level;
19 (8) consumer credit information or score;
20 (9) ownership or interest in real property;
21 (10) any indication of a consumer's price elasticity of demand; and
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00061-02-3
A. 843--A 2
1 (11) any other characteristic indicating or tending to indicate the
2 socioeconomic status of an individual.
3 (b) It shall further be unlawful to consider the factors specified in
4 subdivision (a) of this section to:
5 (1) adjust any algorithm or equation used to construct actuarial
6 tables or otherwise determine the cost of coverage;
7 (2) make any distinction or discrimination between persons as to the
8 premiums or rates charged for motor vehicle insurance policies or the
9 terms of coverage or in any other manner whatsoever;
10 (3) demand or require a greater premium from any person than such
11 insurer requires at that time from other individuals or entities in
12 similar cases; or
13 (4) refuse to issue, renew, or sell a policy after appropriate appli-
14 cation therefor.
15 (c) For the purposes of this section:
16 (1) "sex" shall include gender identity or expression; and
17 (2) "gender identity or expression" shall have the same meaning as
18 defined in section two hundred ninety-two of the executive law.
19 § 2. This act shall take effect immediately.
