Insurance practices targeted

DOVER — After nearly two hours of debate, legislation to protect gender equity in automobile insurance pricing was passed in the Senate on Tuesday.

Senate Bill 231 would prohibit the use of gender, gender identity, or sex as a rating factor in personal automobile insurance policies. Measures to remove these characteristics as rating factors have been passed in six states including California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania.

The bill was introduced last month after the Delaware Department of Insurance and the Consumer Federation of America released a report showing that Delaware women are paying higher automobile insurance premiums than men. The report states that even when other risk factors are the same, women are paying more for automobile insurance.

The report, titled “Gender Disparities in Auto Insurance Pricing”, also showed that even with more female drivers than male drivers in Delaware, female drivers get into accidents at a far less rate. In the report, Department of Insurance Commissioner Trinidad Navarro stated that some of the state’s largest insurers charge female drivers 8-9% more than male drivers when vehicle and driving history are the same, creating a cost disparity than can rise to 20% under some automobile insurance plans.

SB 231 sponsor Sen. Kyle Evans Gay, D-Talleyville, applauded Mr. Navarro and the Department of Insurance for bringing awareness to these potentially discriminatory rating factors, citing the unfairness that these factors could cause in the pricing process.

“What is fair about charging a person for a service not based on how they use the service, but who they are?” Sen. Gay said.

“Insurance companies choose not to use sexual orientation, national origin, or religion in rating. There is no rational. There is no fair reason to distinguish gender, sex or gender identity for that same purpose.”

The Department of Insurance’s report stated insurance companies don’t agree on how big a factor gender plays when assessing the price of a person’s premium, as GEICO and Progressive charged Delaware women at a higher rate than men in the same age group, State Farm and California Casualty charge men and women the same rates and Donegal Mutual Insurance Co. charges men a higher rate.

According to data provided by the Consumer Federation of America, a 35-year old female driver with a perfect driving record could be quoted an average annual premium 3% to 20% higher than a man the same age would be offered. Sen. Brian Pettyjohn, R-Georgetown, said this statistic in the report was misleading.

“The report is based on a hypothetical person. We’ve gone through all the factors that are there. That’s a very broad statement. You have to look at other age groups to make such a broad statement,” Sen. Pettyjohn said.

Nancy Egan, counsel member at the American Property Casualty Insurance Association, echoed this statement, saying she did not agree with Mr. Navarro due to the broad conclusions within the report. Ms. Egan said the report was concerning, as it should have included data that was more representative of Delaware’s population of women.

“My experience has actually shown that gender is a strong predictor of losses with the relative risk between genders varying by age,” Ms. Egan said.

“They’re basing an entire report on a hypothetical age group.”

Sen. Gay called Mr. Navarro as a witness to help explain the reasoning and relevancy of the statistics within the Department of Insurance’s report, as Sen. Pettyjohn and Ms. Egan’s concerns pertained to the use of the age 35 as a basis for the statistics. Mr. Navarro cited higher risks at both younger and older ages as a reasoning for the number.

“We use a middle of the road number, and again, this isn’t an arbitrary number system. We just decided that this is a number we thought was the most fair, and the data is crystal clear. The data provided by the industry is crystal clear,” Mr. Navarro said.

Ms. Egan said should this bill be passed, insurance companies will have less predictability on future losses for automobile insurance, thus putting pressure on all rates. She said this will result in higher prices for those paying less and lower prices for those paying more, benefiting risky drivers who would then be subsidized by the marketplace.

Current state laws complicate the automobile insurance pricing process for those who do not identify with their gender assigned at birth. For those who may be trans-gender or transitioning, an increase up to $100 or more could come as an additional cost for those who change their legal identity. Mr. Navarro said this is just another reason why gender is a factor that is not relevant to those seeking automobile insurance premiums.

“The industry did use factors like this for years, but these factors are unfairly discriminatory. I mean the industry used to redline people, they didn’t short people because of the color of their skin or where they lived. That was OK for years until we put a stop to it,” Mr. Navarro said.

The Senate moved on to a roll call vote for SB 231, where the bill would ultimately pass by a vote of 11 for, eight against, and two not voting. The bill will now be sent to the House chamber for consideration.

In other business ...

Aside from SB 231, additional legislative progress was made by the Senate Tuesday.

In the Senate Legislative Oversight & Sunset Committee meeting, House Bill 320 was voted out and onto the ready list. The bill, which was sponsored by Rep. Debra Heffernan, D-Bellefonte, would allow physician assistants and advanced practice registered nurses to prescribe Mifeprex, Mifepristone, and Misoprostol. These are medications that block progesterone and can end pregnancies that are less than 10 weeks along.

Since HB 320 already passed in the House Chamber, the legislation will now be voted on in the Senate Chamber. Should the bill pass in the Senate, Gov. John Carney will have the chance to sign the legislation into effect.

In addition to HB 320 and SB 231, the Senate passed Senate Substitute 1 for Senate Bill 208 by a vote of 20 for, and one not voting. The bill, sponsored by Rep. Jack Walsh, D-Stanton, clarified language within SB 208 relating to when unpaid wages should be paid by employers.

SB 208 states that an employer is liable for damages if the employer does not make wages available on the next payday after an employee quits, resigns, is discharged, suspended or laid off. SS 1 clarifies that wages will be paid on the next pay cycle or within three business days, and that the employee must be paid by their desired channel.

The final piece of legislation passed by the Senate was Senate Bill 224, which raises the threshold limit that is required of a building and loan association in order to obtain federal deposit insurance from $10 million to $15 million. The bill, sponsored by Sen. Pettyjohn, passed by a vote of 19 for and two not voting.

Senate committee meetings will be held today starting at 10 a.m. with the Senate Health & Social Services. The Senate Chamber has one item on the agenda for today, as Senate Bill 217 will be heard. SB 217 permits the Delaware State Fire Prevention Commission’s vehicles as emergency vehicles that may be equipped with emergency lights, and will be heard when the chamber reconvenes at 4 p.m.

Staff Writer Joseph Edelen can be reached at [email protected] Follow @JoeEdelenDSN on Twitter