House Dems push to bar auto insurers from using personal data to set rates

A group of Democratic lawmakers in the US House of Representatives have reintroduced a bill that would prohibit private passenger automobile insurers from using personal and demographic data to determinate rates.

Reps. Rashida Tlaib (D-Mich.), Bonnie Watson Coleman (D-NJ) and Mark Takano (D-Calif.) announced May 30 that they are backing HR 3664, also known as the Prohibit Auto Insurance Discrimination Act. The legislation would bar auto insurers from considering factors including income, credit score, education level, gender, occupation, marital status and employment status when setting rates or determining policy eligibility.

The bill was initially introduced in the Senate by Cory Booker (D-NJ) in September 2020. Companion legislation was filed in the House by Tlaib and Coleman, but the measure did not move forward.

"Your auto insurance rates should be based on how good your driving is, not unrelated factors," Takano said in a statement.

In a press release, the bill's three sponsors said that there is a "lack of evidence" that the factors that would be barred from use in the legislation actually identify "risky drivers."

The National Association of Mutual Insurance Companies issued a release June 3 calling the legislation "misguided" and an intrusion on state insurance regulatory authority that could lead to rate hikes for drivers. Independent studies have shown the use of non-driving factors both helps insurers more accurately assess risk and leads to rates that are "actuarially sound, the trade group said.

"The use of rating factors is approved by state regulators for a very simple reason, they have been actuarially proven to correlate with the risk a potential policy presents," said Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies. "When predictive factors are taken away, rating becomes less accurate, and safer drivers are forced to subsidize coverage for riskier drivers."