American Property Casualty Insurance Association
  • Staff Contact: Eileen Gilligan     
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  • February 7, 2018
  • PCI Urges Maryland Lawmakers to Protect Insurance Consumers and Markets and Defeat HB 656 and HB 657
  • ANNAPOLIS, Md. — Nancy Egan, state government relations counsel at the Property Casualty Insurers Association of America (PCI) will testify tomorrow before the House Economic Matters Committee in opposition of HB 656 and HB 657. These two bills would ban insurers from using actuarily proven factors to provide more accurate underwriting and pricing for the benefit of consumers. HB 656 would ban insurers from using education and occupation. HB 657 would ban insurers from using marital status and gender.

    “Factors such as education, occupation, marital status, and gender are actuarily proven to be highly predictive of the likelihood of an insurance loss, which allows for more accurate underwriting and pricing. Actuarily sound, risk-based pricing benefits consumers, as they pay based on the level of risk they represent,” said Egan.

    “The use of underwriting factors, such as education, occupation, marital status, and gender have been repeatedly approved by various state regulators,” continued Egan. “All evidence indicates that those insurers that choose to use education, occupation, marital status, and gender do so because that information is predictive of insurance loss and allows for more accurate underwriting and pricing.

    “Insurers use varying rating factors differently, depending on the loss experience. This creates an opportunity for consumers to shop around to find the insurer that offers the best price for their own risk characteristics,” said Egan.

    “Implementing restrictions on the use of underwriting factors could harm the marketplace, thereby negatively impacting a state’s economy,” continued Egan. “These limitations also could create unfair subsidies among consumers, stifle competition, limit innovation, and force insurers to be more cautious about writing new business or expanding into new markets. As a result, consumers could experience less choices in the marketplace and higher than average costs.

    “PCI urges Maryland’s House of Delegates to oppose HB 656 and HB 657,” concluded Egan.

  • PCI promotes and protects the viability of a competitive private insurance market for the benefit of consumers and insurers. PCI is composed of nearly 1,000 member companies, representing the broadest cross section of insurers of any national trade association. PCI members write $220 billion in annual premium, 37 percent of the nation's property casualty insurance. Member companies write 44 percent of the U.S. automobile insurance market, 30 percent of the homeowners market, 35 percent of the commercial property and liability market and 37 percent of the private workers compensation market.
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