Washington, D.C.—The Consumer Federation of America (CFA) urged the District of Columbia Insurance Department to release its long-awaited report on unintentional bias in auto insurance, in a letter sent to the Department today. The report, which was expected to be released in January, should detail the findings of a Department data call concerning auto insurance companies’ underwriting and pricing of policies to assess whether they disproportionately harmed people of color in the District.
“Consumers deserve an accurate picture of unfair discrimination and bias in auto insurance and the delayed release is disconcerting,” the nonprofit, nonpartisan group wrote. “Most importantly, DC drivers who are struggling to keep up with increasing premiums need to see the Department moving forward on issues of marketplace bias and unfairness, and right now the effort appears stuck in park.”
DC’s data call and investigation is among the first efforts in the nation to understand the extent to which insurance industry algorithms for selling and pricing insurance might systematically disadvantage people of color. Colorado is developing regulations concerning testing of insurance algorithms and New York has issued a draft comment letter that also addresses bias testing for insurance.
The Department’s process for collecting the data and issuing the report has been lengthy. First, the Department held a public hearing on Wednesday, June 29th, 2022 to get input from stakeholders, including insurers and consumer advocates, on the review plan. During the fall of 2022, the Department also held one-on-one meetings with stakeholders and hired the consulting company O’Neil Risk Consulting and Algorithmic Auditing to help with the analysis.
On January 9th, 2023, the Department exposed its proposed data call for review, and received numerous comments. The data call was issued in February 2023. The Department stated that the results of the data call would be issued in a report, which CFA expected to be released in January 2024.
Although it has not been confirmed, CFA has been told that at least one insurance company representative has reviewed the report. CFA said that, if true, it is concerning that industry might be using their access to water down the report. To date, the only explanation provided to CFA regarding the delay is that the report needed to be reviewed by the Mayor’s Office in January.
“With auto insurance premiums rising rapidly, the most financially vulnerable and historically underserved consumers are likely bearing the worst of these increases, which only adds to the urgency that your report be made public. The discussions around how to best address the high cost of auto insurance and insurers’ use of socio-economic factors in price setting will benefit from your research. But the public should not have to wait any longer to get their chance to consider your findings,” CFA’s letter concluded.