Triple-I Blog | Delaware Legislature adjourns without action on banning Genderas auto insurance factor

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    The Delaware Legislature adjourned for a year without House action Senate Bill (SB) 231which called for banning the use of gender as a rating factor in personal auto insurance policies.

    The measure was based on a study conducted with the Consumer Federation of America, which found that many insured women in Delaware pay more than men, even when all other factors are equal. If signed into law, it would require Delaware auto insurers to review how they rate their personal auto insurance policies for all drivers. Six states — California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania — already have similar laws.

    “The Delaware Legislature and Department of Insurance have the authority and responsibility to govern and regulate how insurance companies do business in the state of Delaware,” said Triple-I’s Chief Insurance Officer. Dale Parfilio wrote in response to SB 231, which passed the Delaware Senate in April 2022. However in his letter He raised several concerns with the underlying research to Delaware Insurance Commissioner Trinidad Navarro, including:

    Website quotes against issued policies. While the Internet and electronic quote processing have dramatically improved the speed and accuracy of quotes, Porfilio wrote, “Many details can change for some of the quotes that end up being issued policies, resulting in quotes not being 100 percent accurate for premiums issued.” .

    A single hypothetical insured versus a range of actual insureds. The report studied hypothetical 35-year-old drivers and then concluded the full range of female and male drivers in Delaware.

    Aggregation by postal codes. Pricing methodologies are refined to very specific geographic definitions that vary by insurer, and the report does not describe how the sample was aggregated by zip code.

    Porfilio explained that passing SB 231 would have the effect of redistributing who pays how much in premiums, with female policyholders paying most of the premium increase (especially at younger ages) and male policyholders receiving most of the premium reduction.

    Critics of U.S. auto insurers’ pricing practices worry that certain rating factors discriminate against certain groups. Triple-I explained in various contexts how US auto insurers use a a wide variety of rating factors precisely conduct a price policy. These factors must be consistent with the laws and regulations of the state in which auto insurance policies are sold, and eliminating any of them could force lower-risk policyholders to overpay and allow higher-risk policyholders to pay less than they should.

    Learn more about auto insurance quotes

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    The IRC has released a state-by-state ranking of auto insurance affordability

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