Iowa Press; 1622; Unisex Insurance

The Iowa Press Show number 16 22 executive producer Specker director of Crowfoot topic unisex insurance length 20 50 taped March 23rd 1989 airs March 26 1989. Oh. A. Major funding for this program was provided by friends of Iowa Public Television. Are insurance rates discriminatory. Some Iowa lawmakers think sold the proposed legislation to force insurance companies into non-gender or unisex pricing.

Tonight and I will press to look at unisex insurance. This is the something. March 26 the opera house here is being born. That evening insurance is something most people might think about about every three to six months when that quarterly or semiannual premium bill arrives in a mailbox and people may casually wonder how a company arrives at the rated bills but then usually write a check mail it and promptly forget about their insurance policy until the next premium bill arrives. But some Iowa legislators have taken a calculator to insurance rate setting and concluded the way insurance business determines his rates is discriminatory. Insurance companies say the rates are not discriminatory but rather a set through a scientific actuarial system based on risk classification and that formula they say considers characteristics such as age health and gender. For example young men pay higher auto insurance premiums

than young women because statistics show that young men have more accidents than young women. While the debate continues in Iowa Nancy Crowfoot reports that at least one state Montana has a unisex insurance law that has been in effect since 1985. The Montana legislature passed a non-gender insurance bill in 1983. It went into effect two years later to allow time for insurance companies to adjust rates. And the Montana insurance commissioner says the move has been beneficial to women. It used to be that. Life insurance in Montana for instance if you a gentleman buys a policy and your benefactor is your. Wife. That if you passed away they would offer her a lump sum or a continual payout. And that payout would be for a very long period of time because she is expected to live longer therefore her dividends would be much smaller. Now

with the current law her rate of dividend would be the same as a man's. And it doesn't matter how long. A person lives. It's not based upon men and women. That may be. But Iowa insurance officials say that in most instances unisex insurance rates would bring overall higher costs to women. Let me give you a couple examples. I think the really relevant ones are where we're likely to get auto insurance I think for young women could be 100 to $200 a year or more. Before life insurance 10 percent to 50 percent more maybe over 20. Much as twenty five hundred dollars more for a woman. Well he's picking the highs and the lows and I guess I referred to those as well young women drivers under the age of 25 their rates came up drastically because they were paying very little in comparison to men drivers of that same age group.

And. But I think that's the only instance where rates dramatically went up. And health insurance did dramatically go down for women because maternity benefits are now being paid for by both men and women and their expensive benefits. That's true for those women who have to buy personal individual coverage under the current system they pay more under unisex they pay less. There really is very few women. It affects very few women. Rhome says because many women are covered under their husband's insurance or if working they are covered under their company's group insurance plan and group health insurance in Iowa according to a report by the Iowa insurance division is already offered on a unisex basis and makes up 90 percent of the health insurance written in Iowa. The same report says that 66 percent of the automobile insurance written in Iowa is

unisex but no life insurance is unisex. Still much of the insurance industry contends across the board unisex insurance pricing would be unfair. Equal treatment under equal circumstances so people with the same risk factors pay the same cost of insurance and people who are on equal pay equal. Is it fair to charge a young woman who has as a class lower risk lower claims for the charger the same as a young man who is higher risk. No. As well as the arguments over the most correct pricing for insurance there are arguments that if past insurance companies in the state of Montana heard similar arguments first that insurance companies were going to leave because they weren't going to redo their books and records just for the state of Montana.

There is business to be had in Montana and insurance companies are going. To do whatever they have to to sell insurance. The difference in Montana is they have no insurance industry. There were very few people spread over all their large state geographic area. They have no big cities near their state borders where people can conveniently go across the state line to buy insurance. None of those things are true in Montana but all of those things are true. The legislature is looking at several non-gender insurance issues the House recently passed and signed onto the Senate one bill that would force insurance companies to equalize health insurance rates and its discrimination provision of that bill would also cover disability insurance. But the bill may face a tougher crowd in the Senate. It's now in a Senate committee chaired by the boring Democrat Bill Palmer who says he has some philosophical concerns about considering only unisex insurance rates. If. The proponents are suggesting that everybody should be treated alike regardless

of gender and by doing otherwise one is discriminating if one would follow that to its logical conclusion then one would say that it's not fair to discriminate against age. Why should a person 50 years old be banned twice as much for life insurance as an individual 20 years old. Why should an individual address an automobile at 85. I find it very difficult to get coverage in many cases because of the age. Why do we discriminate Yes people are physically handicapped or have some type of physical impairment. Well why is most likely one of the questions we'll be talking about tonight but first I want to mention that health is just one of the unisex insurance proposal that the legislature of the House is also slamming bills pending that would make life and auto insurance rates not gender. With us to discuss this question are two lawmakers well-versed and on opposite sides of the issue of unisex insurance representative Minette daughter is in Iowa City a Democrat who's been in the forefront of

changing the way insurance companies determine their rates claiming that many of the rate determination factors are discriminatory. Representative Roger hold Rison is a Republican from Minnesota. He does not favor unisex insurance ratings but rather rates that are based on risk factors. He also is in the insurance business himself. The two will be questioned by Dave register and by Eric Wilson of the Waterloo career. We hear that insurance rates are based on calculated risks. Why should we change the system why should we go to a non-gender insurance. Well I believe that risk is Should is a big factor in insurance. That has been distorted by the insurance companies they like to have all those people out there think that I'm some kind of a radical that doesn't believe in risk factors I just say that sex should not be one of those risk factors. I don't feel that women are a risk factor and I don't think men are either but there are so many other things that they can base it on that would be fair and treat men and women alike.

But isn't it proven that women have fewer accidents women live longer sex is actually you heard from principle just talk about young women. If he was really being fair and honest he would say that women through age 75 have far less accidents and men of the same age but they conveniently forget that I've got a chart here from the Dio team which shows it's two to three accidents per male compared to one by women was Roberson. Why shouldn't the state of Iowa do this. Well first of all I think you have to understand that Iowa has a good insurance. History. We are referred to as a little Hartford around the nation. We have expanded the insurance industry and I will we have. A good industry that is working well and it has it has functioned on the principle of equality and quality in this situation means that you look at each risk and you rate each risk based on the type of risk that is and you charge or rate two different definitions here of

equality minute daughter quality based on the sexes. You see it's equality based on actuarial factors. That's right I think gender is is one of those areas that you can fairly differentiate between. Gender when you look at men and women health insurance the gender the gender aspect comes into play up and down the line. Women on the average have about a hundred fifty percent more dollar cost than men do and as a general rule they pay proportionally more but there are differences in house and blacks and whites live differently. Should we base rates on race. Oh well that's a different category than really about Mormons and Jews they live differently should we base rates on on that basis. Doesn't matter all that insurance companies used to do that it's no longer socially and legally acceptable to base it on race but it's still acceptable by insurance companies because they make more money off of women. You notice the man from principal says almost bragging about that 90

percent of the health rates were already non-gender. So there were only quarrelling about those 10 percent of the people that are out there on their own trying to buy insurance. It's going respond to that Mr. how or why it why it why don't you do it on the differences on the basis of race because there is a difference in how long guns and whites live in and I think 40 years ago 50 years ago companies some companies did rate on the basis of race. Most companies never ever did rate a rate on race alone. Today you don't find any company's rating on race. Most states have laws that prohibit it. But even before that came on the scene got mixed up. Everything that I have ever read about race is when you when you look at blacks versus white locations versus Asians. It's the social economic situation it is not a situation where you can rate every or every person of that

race versus every person of the other race given the same beginning giving the same prenatal care giving the same health conditions. You don't have any differences and there aren't any statistics now because we have been rated by reason to give you want to respond to yes black women are disadvantaged against white men. We charge black women the same as white women and they are disadvantaged and there would be a social economic condition that Roger mentioned they can't afford it and they don't have health insurance many of them in the lower in the lower economic levels of both whites and blacks don't have health insurance. Something about this argument that good insurance state right now it's a good economy builder here you know the thing's been working well up to now. Oh it's exactly the same argument that was used in Montana Massachusetts and Pennsylvania. Of course we're good. We like insurance companies. But that doesn't mean that they can run the legislature and discriminate against women or men in some cases. You know good drivers who are young males are very much

discriminated against because they pay the same level starting out as bad drivers who are men or boys. You know we are not that divided in our society and where we changed every law except the insurance laws that discriminate between men and women. And insurance companies never helped us do that we had to fight for the vote. We've had to fight for every single advance of women to equalize them with men and the insurance company is now saying. But they're doing it for the good of women. They haven't done much else so I just do my own good. And I don't really disagree on equality. I have been a co-sponsor on the. Voted for it. We do not to obviously agree on that issue. We're not are we doing other we do would disagree however on the equality of insurance. Because I'm saying that you can't be equal you can't have equality if you don't rate fair. It is not fair to charge somebody more

than what the risk with the present was you know that was going to who's going to lose in this or you are going to lose and yet in this race women are going to lose women. The Montana experience. The eye will projections. Women are going to lose their auto rates are going to increase their their life insurance rates are going to increase. In Pennsylvania the law that just went into effect in Pennsylvania March 1st of this year 70 percent increase for women for auto insurance that's $400 plus more for young. True that is not true. I want to bring a more practical question I mean the basic question is Who do we believe in these argument you've got the insurance industry on one side we've got the National Organization for Women on the other side where we have more but you know we it seems we don't have any neutral information here who who is the public supposed to believe. Well I think you you might want to ask me I would surance commission if I were insurance commissioner.

Just today in visiting with them. REP. Mr. Hoyer I said Are women going to pay more. Definitely women are going to pay more for their auto insurance are going to pay more for the life insurance. And Bill Hader a neutral source of information in this question has a daughter in the insurance industry and will probably go back well you know they offer him the right price I'm sure he will. Well so Mr. Howard said how can we go back to Eric's question. Who do you believe in this we've got the insurance industry providing figures on one side. We've got these these women's organizations providing information on the other. I think most Iowans would say what I want to they want to do the right thing that you can even or agree on the on the fact you're arguing about well let me just say one thing the insurance industry has not provided us with many figures. We've been trying since last September to get some good figures and the insurance commissioner always says he'll get them for us. And we find the insurance commission there was even have there was supposed to find insurance lobbyist on this program tonight to talk about that and why do you think they don't want to come out here and defend this. Because they are fudging. Now I'm not going to say they're lying

but they're certainly not telling all we the insurance industry presented 14 points to the area legislators around Waterloo for lunch I think it was yesterday we sent those so-called fax over to the insurance commissioner's office. They sent us a she and he denied at least seven of those and said that the insurance statements were not right. You know one of the if I could put in you know I think at some some point we have to to set the record straight. First of all the insurance industry of the insurance commissioner's office. We have had the public interest groups have furnished us with moans and mounds of data the problem with the data is that when it doesn't want to believe that the data continually shows that there are reasons good valid reasons why we should rate with gender as one of the factors. Age is another factor. The problem is I've got mounds of stuff in my desk in my car but you have to believe

the material is furnished to you if you don't believe it and keep asking for more obviously too. It's difficult to argue against equality philosophically according to the sexes. You want to base it on as I said be fairness. Well fairness actually. And philosophically that's hard to sell. Go ahead are you putting principle over person. You're saying OK in principle everyone ought to be treated fairly with equality but then you're going to end up costing some women the very people you're supporting are going to cost them some money I don't know if Actually if they would they say I do rates on the accident rates that I have here I'd go for it because then women would get a break all the way out. Now they give us at most a nine year break and I'm sure I'm going to be driving that car for 60 years paying so-called adult rate. And I have fewer accidents as a woman than a man might in my same circumstances. They don't give me a break.

The insurance industry spent a great deal of money fighting an Equal Rights Amendment I think because they thought that that was one more step toward equality and what it what they're telling us that women are going to pay more men are going to pay more with the insurance companies are going to get less. You know their logic is so faulty. It's awful. They say I'm going to die earlier and I'm not going to die earlier but I pay more because I live longer but who there is no average woman that's going to live that you can pare 86 percent of men and women and they'll die at the same age. Eighty six percent they're basing all this difference on 14 percent. They would like to go back to the economic development issue that was raised earlier. Regardless of who's right or wrong in this the industry is making it pretty clear that this is not healthy for business and I want most people I talk to say they want to encourage the development insurance industry and islands are good jobs that pay benefits there clean. His daughter. How do you respond to that promise that they're making to move those industries out of

this state or someplace else. Well they promised in Montana but they don't have an insurance industry you know about a hundred twenty eight new companies came in there to sell insurance afterwards and they're in their premium rate went up dramatically because more insurance is being sold. Moment to Mr. roams argument there that that's that's an exception this is a state that's got a lot of insurance companies with home offices here the second largest insurance capital in the country I hear that's not true in Montana. No and I have not yet heard an insurance executive tell me they would leave the state if we did this. Mr. Harbison will they. Well I'm not sure that the company you have to understand we're not penalize in the companies when we do these things. The companies are going to be there. They're there today they're going to be there tomorrow they're going to pay out the same number of claims. The difference is who's going to pay the rates that are going to is going to be put in the pot to pay the claims that's the thing I'd like to just touch on something that the grown up and that is the Montana explains the Montana experience is bad it's lousy. The Montana experience when you compare Montana

with Iowa you're comparing a state of 800000 population against one that's almost three million. You're comparing a state that has no domestic insurance companies against the state of Iowa that has 96 domestic insurance companies plus we have a hundred thirty four more mutual associations. Iowa is an insurance state. The Montana experience of women's life insurance rates went up their auto insurance rates went up. The sale of life insurance in Montana since 1985 when that law went into effect has declined every single year. Montana's growth in the insurance industry is half what the national average is. We can't seem to find any agreement on what it's going to do to the industry itself what's what one insurance executive tell me and I'm not going to name him because I don't care insurance industry is not all that anxious to bring in all this new competition they like to state the way it is. It's the governor this wanting to bring in new into insurance. I asked one man I said given all you've told me why do you

want to expand bring in all these new companies. And he looked at me. He said I can't. So there you know that's a lot of propaganda going on out there. The insurance industry is a very healthy industry in the main in Iowa and it will be it will be healthier women will buy more programs. If we can buy them equally with men instead of paying this artificially high price for health insurance all we've done in this bill is gender neutral 10 percent of the policies no one wants to talk about why the Supreme Court decided that this was discriminatory we're talking about 10 percent I mean how many people does this actually affect. I'm not real sure but it is them that a minority of the people but if you if you if you take a table I'm watching this program in a for health insurance is a group policy it doesn't affect her. No. And that's the vast majority so you're really talking about a fairly small group of people. You know your time well you're talking about people that I represent farmers small business people. People don't have open people and people in

small town Isle who don't belong to a group that's that I can always hear of them why is that a bad deal for them. Tell us all that's why it is a bad deal. Well the way it's going to affect them is first of all individuals have what we call adverse selection against a company because they can choose when they choose to to to buy their insurance they don't have anyone who is who is paying for the overruns on a group case an employer pays generally a great part of group insurance. And so when they rate a group it is graded it rated as a gender neutral but to arrive at that rate they plug in all the male rates all the female rates all the ages and the experience of that particular group and that then becomes the gender neutral rate. You have been a champion over the years and. In our age and other things to equalize issues between the sexes. Do

you think that women understand that this may cost them more. And I'm not saying you agree with me but Representative hall verson seems to think that it will cost women more in the long run if this non-gender insurance Unisex is inactive here in Iowa. Do you think that it is more an emotional issue of equality and we're thinking of E.R. and all the other things have equality and women don't really understand that this may not be to their benefit as he alleges. Well the first place we're only doing the health insurance this year. You said that we had a life in audio but those are put aside for this year definitely health insurance. None gendering will help women by reducing their overall costs in health insurance. That's right and disability. Well actually disability insurance right now is non-gendered that is included in this bill but this is a first step for you Would you like to go with the others too. Well I told you just a minute ago I'd be glad to get the breaks all the way out through

75 on auto insurance that we deserve according to our accident rate. But then where is the compromise in this. Where is the middle ground you both are a couple of experienced politicians there. Were can you come to some meeting of the minds oh I did compromise I backed off and just doing three bills the long term nursing care that will help women and that will help everybody that one because we're saying they don't have to spend two days in the hospital prior to getting there because the benefit is that a compromise as far as you're concerned was there however not really whether what kind of compromises. Well there's no middle ground on lines because one of the things we haven't talked about here tonight is another factor that is in the bill and that's proposing and that is not only gender neutral marital status. And when you talk about long term health care you're talking about people 55 and older. Who are buying coverage to cover them when they go to a nursing home. These people are going to be be. Prevented from

buying coverage just as the new policy the Mutawa just came out with this week which provides about a 50 percent rate reduction for married couples so we no longer can read if this bill were to become law on marital status. They recognize the fact that married people stay healthy longer and so they're willing to lower the rate. What's the future that I don't see that is discriminatory. What's the future of this legislation in the Senate I mean it cleared the House last week. Where does it go from here. Well you may not think it's discriminatory but it's in your bill that you prevent that from happening. No I don't. So you've got a marriage penalty though in the bill. You know I don't have a marriage penalty in the bill you are in the insurance company is deliberately distorting after they're saying because there will be a carrying member of this partnership. What it is if there is a caring two people like sisters live together brothers live together a sister will take care of a brother a mother will take care of a child. There are a lot of those two person arrangements where they take care of each other just as a married couple takes care of

you or either you know you or your insurance company will not sell it to them on that basis. And that's all it does or say that will raise your hand and you will receive a lot of good will but your bill and that prevents reading it and I took that out on the gender and gender and marital status. Would you take up a point please let me finish the point is that when you take that provision out of long term health care and probably more important in that particular field than any other field. When you take that provision out you have taken away from married couples or two people living together. A provision that they can help each other stay healthy longer. And you're saying that that is not something that should be used as a factor rating or long with so what's the future of this legislation. Is it going to become law this year. Well it depends upon if I can get 51 votes or 60 get 26 votes in the Senate or Roger can get 26 votes to kill it. That's that simple. Well it will be a sad day in Iowa if it does become law and I will tell you that because it will send a message

all across this country that Iowa no longer is a favorable regulatory state and that all the the governor has been to promote bringing insurance companies as Nate is long gone long as a governor told me he would veto the bill if it comes down. He hasn't and I haven't discussed it with you know the governor is looking at it to make sure I'm sure. And I think he will help us because the governor help us on equal pay for equal work of equal value. The governor would have said a long time ago because insurance companies working hard on him to get him to be told they're going to get stopped. I must interrupt we are out of time. Thank you very much. Representatives holders and daughter for being our guest tonight and I will press we ask you to join us again next week for another addition until then for a panelist and I did you have Senator Rick Wilson I'm dien board inviting you know to stay tuned for more development she has take one of my. Major funding for Iowa press was provided by friends of Iowa

Public Television.