A long and heated debate on the Senate floor on Tuesday preceded the passage of a bill that would make it illegal for Delaware auto insurers to use gender as a factor when determining customer premiums.
Senate Bill 231sponsored by Sen. Kyle Evans Gay, D-Talleyville, came on the recommendation of state insurance commissioner Trinidad Navarro, who said in a press release after the bill passed that it would result a “more equitable society”.
The bill was based on a disputed argument report published in March by Navarro which suggests that some Delaware women pay higher auto insurance premiums than men, even when all other factors are the same.
Despite the amendment to the Automobile Insurance Act, the bill did not pass the Senate Insurance Committee. Instead, it was heard and released by the Senate Transportation Committee, to the amazement of some lawmakers.
“It’s an insurance bill. It didn’t go through the Insurance Committee,” said Sen. Colin Bonini, R-Dover. “Red flag.”
Scores of insurance industry officials testified at Tuesday’s Senate hearing, with almost all of them warning that if passed, Senate Bill 231 would lead to higher insurance premiums for Delaware women.
Navarro’s report is flawed, they said, in that it relies on quotes — not actual premiums — given to a hypothetical consumer who is a 35-year-old woman. The report did not include quotes for consumers of different ages or who have different rating factors.
“My members’ experience shows that gender is a strong predictor of loss, with relative risks between genders varying by age,” said Nancy Egan, director of government relations at the American Property Casualty Insurance Association.
“The experience between the sexes can be very close in middle age while it is significantly different in younger operators and older operators,” Egan said. “The commissioner’s report did not include data for any age group other than 35, which is concerning.”
Egan explained that insurers have used gender as a rating factor for decades — not because they want to discriminate against young men, who pay the highest car insurance premiums.
That’s because it’s a reliable predictor of risk, she said, and that’s how insurance companies are able to provide reasonable rates for safe drivers.
If sex is banned as a scoring factor, Egan warned, safe drivers will pay more and dangerous drivers will pay less.
“The prices Delawares pay for auto insurance should be based on how they drive, not who they are,” Gay said after the bill passed. “As elected leaders, we have a responsibility to ensure that our communities are treated fairly, especially when that means dismantling the pervasive disparities embedded in our daily lives.”
Supporters of Senate Bill 231 have said that on top of the injustice of it all, Delawares who do not identify with either gender find themselves in a gray area. Gay asked Egan how insurers treat these consumers.
Insurers have had to find new ways to determine premiums for non-binary people, Egan said, and more often than not average premiums for male and female drivers who have similar rating factors.
Gay protested that such a practice isn’t fair to non-binary customers, but Egan said that’s exactly what would happen if Senate Bill 231 becomes law.
“You come up with a factor that’s brand new, and like you mentioned, maybe you thought what we were doing was wrong,” Egan told Gay. “So let’s say we average the male and female rate together to determine a rate for a non-binary choice. To me, when you ban gender, that’s exactly what you’re going to do.
“You’re going to combine the male and female rating factors together…so everyone complements the high-risk driver rates with low-risk drivers.”
Bonini called the bill “legislation by press release” and said that if passed, it would undoubtedly increase insurance rates for every family in Delaware.
“We are fundamentally changing the auto insurance market in the state of Delaware based on a study of hypothetical 35-year-olds,” Bonini said. “We shouldn’t be making these decisions based on this little data. If we have to make these decisions, we need to be honest with our constituents about the impacts and the reason for doing so.
States that ban gender as a rating factor in auto insurance premiums include California, Hawaii, Massachusetts, Maine, Michigan, North Carolina, and Pennsylvania.
Montana last year reinstated the use of sex in auto insurance pricing after passing a law to ban it.
In the 43 states without a ban and the 7 states with it, men of all age groups, on average, pay more than women for car insurance.
The bill passed 11 to 8. All seven Republicans and Sen. Darius Brown, D-Wilmington, voted against the bill. Two Democrats declined to vote. Click here to see the roll call.
The bill will now go to a House committee for review.
Charlie Megginson covers government and politics for Town Square LIVE News. Contact him at (302) 344-8293 or [email protected] Follow him on Twitter @cmegginson4.