Prohibits motor vehicle insurers from discrimination on the basis of socioeconomic factors in determining algorithms used to construct actuarial tables, coverage terms, premiums and/or rates

2025 Regular Session Introduced by George Alvarez and 11 co-sponsors

Summary of Bill A 1273 Main Purpose and IntentThe purpose of this bill is to prohibit motor vehicle insurers from using socioeconomic factors as part of the algorithms or formulas

REFERRED TO INSURANCE

Main Purpose and Intent

The purpose of this bill is to prohibit motor vehicle insurers from using socioeconomic factors as part of the algorithms or formulas used to determine actuarial tables, coverage terms, premiums, and/or rates. The bill aims to prevent discrimination in auto insurance pricing and coverage based on a person's socioeconomic status.

Key Provisions

Prohibits auto insurers from considering factors like credit scores, education levels, occupation, income, and other socioeconomic variables when developing the algorithms, models, or actuarial tables used to set insurance rates, terms, and coverage.

Requires insurers to file their rating models and algorithms with the state Department of Insurance for review and approval to ensure compliance.

Empowers the Department of Insurance to investigate potential violations and levy fines or other penalties against insurers found to be discriminating based on socioeconomic factors.

Establishes a private right of action, allowing individuals to sue insurers for unlawful discrimination in insurance pricing and coverage.

Affected Entities and Stakeholders

Motor vehicle insurance companies operating in the state would be subject to the new anti-discrimination requirements.

Consumers purchasing auto insurance policies would benefit from more equitable pricing not based on socioeconomic status.

The state Department of Insurance would be responsible for oversight, enforcement, and rulemaking related to the new law.

Procedural and Timeline Aspects

The bill was introduced in the state legislature on January 9, 2024 and has been referred to the Insurance committee for consideration.

The bill has several related prior-session versions dating back to 2019, indicating this is an ongoing legislative effort to address this issue.

If enacted, the new requirements would take effect 180 days after the bill is signed into law, giving insurers time to update their pricing models and practices.

Overall, this bill aims to prohibit unfair discrimination in auto insurance based on socioeconomic factors, requiring insurers to rely on more objective, actuarially-sound factors when setting rates and coverage. Its passage could have significant impacts on insurance affordability and accessibility for consumers across the state.