The New York Department of Financial Services enacted new regulations this week that are aimed to prevent discrimination in auto insurance based upon education or employment. The sticky point is that many underwriters find this data to be predictive of losses. These two criteria will be generally prohibited from use in establishing initial tier placement, tier movement or premium rate for private passenger automobile insurance in New York.
The DFS left the door open to insurers to prove that the use of these two criteria would not result in unfairly discriminatory pricing. In the case of occupation, this means showing that a particular line of employment has a reasonable relationship to loss without reference to becoming unemployed or income. Insurers have 180 days to comply; the regulation will become effective 90 days after publication in the State Register and provides 90 days to amend multi-tier rating systems.
One unanswered question is whether the NYDFS may suggest that not marketing to certain populations based upon education or employment will result in discriminatory treatment. It will be important to look for clues to the use of this approach.
Steven A. Cash, Benjamin H. Nissim and David Forscey, policy analyst for the Homeland Security & Public Safety Division of the National Governors Association, co-authored an article, "Cybersecurity Is The Next Frontier Of State Regulation," for Law360.
On January 12, in its Stamford office, Day Pitney held a 2-part, complimentary CLE program on cybersecurity issues facing the insurance industry.
Day Pitney Alert
On November 17 – 18, Michael Mullins will speak at the ARIAS U.S. Fall Conference and Annual Meeting at the New York Marriott Marquis.
Day Pitney Press Release
On January 5, Day Pitney hosted a speech by Robert L. Capers, the U.S. Attorney for the Eastern District of New York, to the White Collar Crime Committee of the American Bar Association's Business Law Section (WCCC) at the firm's New York City office.
Eric Fader was quoted in an article, "Unknown Future of ACA Puts Blues Plans In an Uncomfortable Spot Heading Into '17," published in The AIS Report on Blue Cross and Blue Shield Plans.
Bill Goddard was quoted in an article, "4 Key Battles To Watch Over NAIC's Cyber Model Law," in Law360. The article is about the National Association of Insurance Commissioners draft of a model law outlining how insurers must safeguard consumers' information and respond in the event of a data breach.
John McLafferty was quoted in an article,"New pay equity law offers fertile ground for litigation," in Massachusetts Lawyers Weekly.