Lawmakers discuss gender in insurance rates

DOVER — In the state of Delaware, women are potentially paying more for their auto insurance than men.

Earlier this month, state Insurance Commissioner Trinidad Navarro and his office released a report titled “Gender Disparities in Auto Insurance Pricing.”

The research showed that many Delaware women pay more per year in premiums, even when all other factors are the same. While there are more female drivers on the road, state data shows that men are involved in more accidents.

In response to the report’s findings, Commissioner Navarro and his department teamed up with members of the General Assembly’s Women’s Caucus to create legislation to end this practice.

On Tuesday, the state Senate’s six-member Transportation Committee held a hearing on legislation introduced by Sen. Kyle Evans Gay, D-Talleyville, created by lawmakers and the Insurance Commissioner’s Office.

Senate Bill 231, if enacted, would prohibit the use of gender, gender identity or sex as a rating factor in personal automobile insurance policies.

“Despite the concerning data in this report, now is not the time to call your agent and change insurers — now is the time to call your legislator. We must solve this issue for every person, and your advocacy can help make that happen,” said Commissioner Navarro in a statement following the report’s release.

“I am grateful that two of our state’s strongest advocates for gender equality, Majority Leader Valerie Longhurst and Senator Kyle Evans Gay, will lead the effort to end this pricing practice through the General Assembly. Their successes in the passage of the Equal Rights Amendment and leadership in the new Legislative Women’s Caucus, combined with public support, will put us on the path to progress.”

For Sen. Gay, this issue is important because it is about gender equality.

“Most Delawareans would be surprised to learn that gender factors have any bearing on premium pricing, which should be based in data and accident records,” said Sen. Gay, prime sponsor of the legislation. “I recently worked with advocates on a related issue to allow for gender to be accurately reflected on driver’s licenses. Gender equality is foundational to the laws of our state, and we must enforce it at every opportunity — particularly when it comes to commodities so ubiquitous as driver’s licenses and auto insurance.”

The Delaware Department of Insurance partnered with the Consumer Federation of America to conduct the study.

The Consumer Federation of America is a nonprofit organization founded in 1968 to advance consumer interests through research, education and advocacy. According to CFA’s website, its members are nearly 300 consumer-oriented nonprofits, which themselves have a combined membership of 50 million people.

“Legislators and state regulators have a responsibility to make sure that auto insurance is affordable and that consumers aren’t unfairly discriminated against. Unfortunately, right now, that often isn’t the case. A lot of auto insurers use numerous non-driving factors to unfairly discriminate against drivers … These non-driving factors include gender, someone’s education level, someone’s occupation, their credit score and others. And when insurers use gender and auto insurance pricing, women generally — in some cases, men — wind up paying higher premiums even if they have perfect driving records. This is unfair and unjust. It doesn’t accurately reflect risk or what insurance premiums should be,” said Michael DeLong, a research and advocacy associate with the Consumer Federation of America, on Tuesday.

Department of Insurance officials believe that the practice of considering gender when calculating how much a driver must pay is wrong, and also believe that making insurance more affordable for everyone will help more people be insured.

“Gender is not adequately predictive of risk and is likely to become less predictive over time. We’re also making this effort because insurance is a required product and cost is a key factor in why individuals are uninsured, which raises rates for everyone,” said Christina Haas, senior policy advisor for Commissioner Navarro.

Six states — California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania — have similar laws on their books. The state of New Hampshire does not require auto insurance for all drivers.

According to the state Insurance Department, the measure would not make insurance more expensive for everyone.

“The legislation will not universally raise rates on men, young women or any group currently rated more favorably by insurers,” Ms. Haas said.

Insurance companies keep how they set their rates confidential. On Tuesday, Ms. Haas said that insurers hide their premium practices behind a “curtain of complexities.”

Because insurance companies don’t reveal how their rate decisions are made, state leaders believe that legislators must step in to make sure Delawareans are not being overcharged, Ms. Haas said on Tuesday.

During Tuesday’s hearing, lawmakers heard some support for the measure from groups like the League of Women Voters.

“This legislation clearly rights a wrong,” said Linda Barnett of the League of Women Voters.

But insurance company representatives spoke out against the bill.

Many attacked the report that inspired the legislation while others said that lawmakers should take more time to consider the report’s information.

Scott Kidner, a spokesman for independent insurance brokers, urged lawmakers not to advance SB 231 during the hearing.

“With all things insurance, these things are not easy. They’re always complicated. And there are multiple factors that go into rates. So, we do ask the committee to not advance this bill until there’s more time to discuss,” Mr. Kidner said.

Claire Pantaloni, vice president of advocacy for Insurance Agents & Brokers, a trade association of independent insurance agents, said her group was unsure of the data used to create SB 231.

“Our conclusion was that legislating this is premature. We’re still skeptical that the data accurately reflects market pricing. And we believe that the DOI has some options at its disposal to further investigate this before legislating it,” she said.

If signed into law, SB 231 would not go into effect until Jan. 1, 2027.

The Senate committee ultimately did move to release the bill from committee. The measure received four favorable votes and one unfavorable vote.

As of Thursday, the act was placed on the list of bills to be debated on the floor of the Senate. No date for when that might happen was given.

Business editor Logan B. Anderson can be reached at [email protected].

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