BILL NUMBER: S6685
SPONSOR: PARKER
 
TITLE OF BILL:
An act to amend the insurance law, in relation to prohibiting motor
vehicle insurers from discriminating based on socioeconomic factors
 
PURPOSE OR GENERAL IDEA OF BILL:
Prohibits motor vehicle insurers from discrimination on the basis of
socioeconomic factors in determining algorithms used to construct actu-
arial tables, coverage terms, premiums and or rates.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1: The insurance law is amended by adding a new section 2618.
Section 2: This act shall take effect immediately.
 
JUSTIFICATION:
In order to comply with New York State law a person operating a car must
have limited liability auto insurance. Currently, auto insurers doing
business may use any range of factors to determine premiums which leads
to adverse treatment of low-to moderate-income drivers.
In the State of New York, insurance companies are using factors other
than a driver's experience and driving record to calculate a drivers'
premium. Insurers use a wide range of socioeconomic and non-driving
factors to determine a driver's premium. Insurers use credit scores,
occupation, level of educational attainment, marital status, and
homeownership in addition to already prohibited factors such as age and
sex. Some insurance companies even use consumer data to determine wheth-
er a customer is likely to shop around, and then sets prices for its
policies accordingly. Using socioeconomic and non-driving factors that
are not inherently related to a person's ability to operate a car, safe-
ly, forces good drivers who are of lower socioeconomic status to pay
more for our State's obligatory auto insurance. By using rating factors
such as these, good drivers of lower socioeconomic status are not treat-
ed equally in the auto insurance market place.
The Western New York Law Center, among other state and national organ-
izations, has conducted research looking into the impact of socioeconom-
ic factors on auto insurance premiums for New York Drivers. The Western
New York Law Center recently did a study that examined over 5,000 rate
quotes for drivers in Western New York. They found that a woman with a
lower socioeconomic status pays as much as 227.11% more for limited
liability auto insurance than a driver with the same driving record and
a high socioeconomic status. A man with a lower socioeconomic status is
charged 174.26% more for limited liability auto insurance than a driver
with the same driving record and a high socioeconomic status. Simply
put, when all driving related factors are held constant, drivers with
lower levels of education, occupational status, marital status, and
renters all pay between 1.74 to 2.27 times as much for auto insurance as
their higher status peers. It is time to stop allowing these rating
practices that aid in perpetuating the cycle of poverty.
 
PRIOR LEGISLATIVE HISTORY:
2021-22: S5904 - Referred to Insurance
2019-20: S.7667- Referred to Insurance
2017: S. 2854 referred to Insurance
2016: S.7904 - Referred to Insurance
 
FISCAL IMPLICATIONS:
None
 
EFFECTIVE DATE:
This act shall take effect immediately