American Property Casualty Insurance Association: The Fairest Way To Reduce Insurance Costs Is To Decrease Crashes Through Roadway Safety Initiatives

WASHINGTON, Jan. 21 (TNStalk) -- The American Property Casualty Insurance Association issued the following statement on Jan. 20, 2023:

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The American Property Casualty Insurance Association (APCIA) issued the following statement in response to President Biden's comments about auto insurance rates at the National Action Network's Annual Dr. Martin Luther King Jr. Day Breakfast on January 16, 2023. This statement can be attributed to Nat Wienecke, Senior Vice President for Federal Government Relations and Political Engagement.

"Discrimination in the insurance industry based on race is illegal in every state, and is not tolerated by the industry's 56 state insurance regulators nor by the insurance industry itself. These important antidiscrimination laws are vigorously enforced by the over 13,000 regulatory staff across the country through constant examinations and rating filing reviews and approvals. Any violations are swiftly resolved using a myriad of enforcement tools available to state insurance regulators.

"Insurance companies do not collect or use data on race and are prohibited by law in every state from pricing insurance based on race. We are troubled by his comments, including the inaccurate statement that there is 'no basis for it (price differentials), none at all, other than you're Black and I'm white.'

"The foundation of insurance is the transfer of risk from the policyholder to the insurer in exchange for a premium that accurately and fairly reflects the cost of the risk being transferred. As the risk being transferred is always prospective, insurers use historical loss data to predict this future risk and estimate its likely cost. All of the historical loss data, as well as every rating factor used by insurers, is reviewed by our regulators and must be actuarially justified and an accurate indicator of future risk. If one policyholder's premium is higher than another, even if they have the same car, there is required to be a strong actuarial basis for that difference that has nothing to do with the race of the policyholder.

"The insurance industry has supported many of this Administration's priorities and efforts in Congress to reduce factors that contribute to societal inequities in communities across America. We look forward to continuing this work with President Biden and the Congress to identify factors that drive up costs for communities that can least afford them and seek broad-based solutions that get to the root of these challenges and support inclusive prosperity for all Americans."

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Original text here: https://www.apci.org/media/news-releases/release/74373/