One could argue that virtually everything one does, and does not do, influences thinking and decisions, so where are the boundaries?
WASHINGTON, Feb. 8 -- The National Association of Mutual Insurance Companies issued the following news release:
A rule issued today by the Department of Housing and Urban Development threatens the ability of insurers to distinguish between risks, and could ultimately mean higher costs for consumers, the National Association of Mutual Insurance Companies said today.
"The final rule released by HUD is an unacceptable overreach by an agency that has no authority to regulate property/casualty insurance," said Jimi Grande, senior vice president of federal and political affairs for NAMIC. "If allowed to stand, this rule could undermine the entire process of insurance underwriting, effectively blinding insurers as they attempt to determine potential risks and appropriate pricing, and needlessly raising costs for all consumers."
The rule released by HUD codifies the use of "disparate impact" analysis to prove allegations of unlawful discrimination with regards to homeowners insurance, meaning any factor used by insurers to assess risk could be challenged if it produces statistically disproportionate outcomes among particular demographic groups. The rule will apply in situations where there was no intent to discriminate, and where all policyholders and applicants for insurance were subjected to the same underwriting and pricing criteria without regard to race, ethnicity, or any other prohibited characteristic. Discrimination issues relating to insurance have traditionally been addressed by state regulators, as federal law establishes insurance regulation under the jurisdiction of the states.
"To be clear, NAMIC and its members do not condone unfair discrimination in any aspect of our business," Grande said. "Every state and territorial jurisdiction already enforces laws and regulations to appropriately protect consumers from unfair discrimination, and we support all of the regulatory provisions that appropriately define and enforce this critically important goal. However, at no point has HUD offered any evidence of any case where any state regulation of insurance has failed to find and stop discrimination, or even attempted to justify its intrusion into what is, under federal law, the jurisdiction of the states."
Throughout the rulemaking process, NAMIC voiced strong concern about applying the disparate impact standard to insurance.
"Since this rule was first proposed in November of 2011, NAMIC has warned against the disastrous consequences of imposing the disparate impact standard on homeowners insurance," Grande said, "and sought to work with HUD throughout the rulemaking process to protect the underwriting system and its ability to distinguish between low and high risk properties and price accordingly. As those efforts were ignored, preparations were made in the event a legal challenge would be required. With the release of the final rule, NAMIC fully anticipates an industry legal challenge to overturn the rule."
TNS-LE 130209-4197569 StaffFurigay