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Bill

SB 1005

AN ACT PROHIBITING THE USE OF GEOGRAPHIC LOCATION AS A FACTOR IN DETERMINING PREMIUM RATES.

2025 Regular Session Introduced by Mae Flexer and 1 co-sponsor

Connecticut would ban insurers from using geographic location in premium pricing, potentially lowering costs for urban/disadvantaged areas but raising them elsewhere and risking market withdrawal.

REF. TO JOINT COMM. ON Insurance and Real Estate
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Bill Summary · SB 1005

Legislative bill overview

SB 1005 would prohibit insurance companies from using geographic location as a factor when setting premium rates for insurance policies. The bill removes zip codes, neighborhoods, or other location-based data from the underwriting and rating formulas that insurers currently use to determine what customers pay for coverage.

Why is this important

Geographic rating is a common industry practice that often results in higher premiums for urban and lower-income neighborhoods, even when risk factors don't justify the disparity. Eliminating this practice could reduce insurance costs for residents in historically redlined or economically disadvantaged areas, though it may increase premiums in lower-risk regions and affect insurers' pricing models significantly.

Potential points of contention

  • Actuarial fairness debate: Insurers argue location correlates with legitimate risk factors (population density, theft rates, property values); removing it could force cross-subsidization where lower-risk areas subsidize higher-risk ones
  • Market impact and availability: Insurance companies may respond by withdrawing from certain markets or raising rates across the board, potentially reducing competition and consumer choice
  • Definition and enforcement challenges: The bill would need clarity on what constitutes "location" (zip code vs. rural/urban designation) and how insurers can comply while still considering legitimate non-location risk factors that correlate with geography

Compiled from official sources — confirm details with the bill’s official record.

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