Superintendent of Financial Services Linda A. Lacewell announced Wednesday that Tri-State Consumer Insurance Company (Tri-State) will pay a $500,000 penalty to New York State for multiple violations.
A New York State Department of Financial Services (DFS) investigation uncovered that Tri-State failed to timely comply with New York State Insurance Regulation 150’s prohibition on insurers using an individual’s occupational status and/or educational level in setting rates.
The use of education and occupation in determining insurance rates can penalize drivers without college degrees or who work in low-wage jobs or industries. The result is that drivers with higher education and income pay less for auto insurance with no evidence that they are better drivers.
“We expect all regulated insurance entities to be in compliance with New York State Insurance Law and Regulations,” said Lacewell. “Regulation 150 protects New York consumers from unfair discrimination, which is critically important as we continue the fight for racial and economic justice. The Department will vigorously enforce the law to protect consumers and the integrity of the insurance industry as we build back better.”
Tri-State failed to comply with regulation 150, and lagged behind the entire industry in this respect. Over the course of the investigation, DFS repeatedly expressed concerns about Tri-State’s approach to compliance, and as part of its agreement with DFS the company has agreed to employ a competent General Counsel and/or Chief Compliance Officer going forward.