Bill

S 4082

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 Cordell Cleare and 3 co-sponsors

Prohibits motor vehicle insurers from using socioeconomic factors in underwriting and pricing algorithms, boosting fairness for policyholders and applicants.

REFERRED TO INSURANCE

WeVote Research Nonpartisan

Bill Summary · S 4082

Summary of Bill S 4082

Overview

Bill S 4082 would prohibit motor vehicle insurers from discriminating on the basis of socioeconomic factors when using algorithms to construct actuarial tables, determine coverage terms, and set premiums or rates. The bill is currently in the legislative process and has been referred to the Insurance Committee.

Purpose and Intent

Ensure that pricing, coverage terms, and other insurance decisions derived from insurer algorithms are not driven by a policyholder’s socioeconomic status.
Promote fairness and reduce the potential for bias in automated underwriting and rating practices.

Key Provisions (as described)

Prohibition on discrimination: Insurers cannot use socioeconomic factors in their algorithmic processes that influence actuarial tables, coverage terms, premiums, or rates for motor vehicle insurance.
Scope: Applies to motor vehicle insurers subject to the bill’s jurisdiction.
Definitions: The bill references “socioeconomic factors” and “algorithms,” with the precise definitions to be found in the bill text (not provided here).
Enforcement and penalties: Specific enforcement mechanisms, penalties, and remedies are not detailed in the provided information.

Who Is Affected

Affected entities: Motor vehicle insurers operating under the bill’s jurisdiction.
Affected individuals: Policyholders and applicants seeking motor vehicle insurance could benefit from protections against socioeconomic-based discrimination in pricing and terms.

Procedural and Timeline Aspects

Introduction: January 31, 2025.
Status: Referred to the Insurance Committee (listed twice in the record).
Next steps: Pending committee review, potential floor action, and eventual passage or defeat in the chamber.

Related Legislation

Related bills from prior sessions: S 7904, S 2854, S 7667, S 5904, S 6685. These indicate prior-year interest in restricting discrimination in auto insurance practices.

Potential Impacts and Considerations

Positive impacts: Increased fairness in pricing and coverage; greater transparency in how algorithms affect insureds; potential reduction in socioeconomic bias.
Considerations: The lack of defined terms in the summary means the bill’s effectiveness will depend on how clearly socioeconomic factors and discrimination are defined; insurers may need to adjust data practices and audit algorithms; potential costs or compliance burdens for insurers; interplay with existing state anti-discrimination and data-use laws.

For readers seeking a deeper understanding, review the bill text for precise definitions, scope, enforcement provisions, and any anticipated effective date.

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