Content area
Full text
Back in the 1980s, it appeared there was enough momentum to eliminate the practice of sex-distinct rates. Critics argued that gender-based pricing was offensive to basic civil rights principles and that the conventional wisdom saying it benefited women was illusory. Sweeping change was predicted following the Arizona vs. Norris and the City of Los Angeles vs. Manhart decisions mandating the use of unisex mortality tables for employment-related retirement benefits.
In addition to these federal rulings, there was considerable activity on the state level. Montana signed into law rules forbidding the use of sex or marital status in determining rates for all lines. Massachusetts became the first state to administratively ban sex discrimination by insurance companies in determining policy rate or benefits for all lines of insurance as well. Hawaii, Michigan, North Carolina and Pennsylvania passed laws to prohibit the use of gender in setting rates for automobile coverage.
Lead by regulators, women's and consumer's groups, reformers appeared to have the strength of conviction to ensure an underwriting revolution. However, the reformers may have underestimated their opponents. Always opposed to further regulation, the industry fought vigorously against any attempts to limit the use of what it considers cost-based pricing, arguing that gender is clearly a significant and reliable cost factor in insurance. As a result of this fierce opposition. and despite mostly favorable results in those states that have unisex rating, there has been little movement in this area lately and even an unwinding of some reform efforts.
At least 15 other states introduced but failed to pass unisex legislation over the last decade. In Massachusetts, the Supreme Court ruled the insurance commissioner lacked the authority to order a unisex system. Judges in Maryland ruled that the state's insurance department exceeded its authority when it prohibited a life insurer from engaging in sex-based rating and pricing. The National Organization for Women reports it lost a chance last year in Pennsylvania to further change auto insurers' underwriting practices. Even in Montana, a state that has successfully fought off repeated efforts to repeal its unisex law, some are saying the battle isn't over. What's more, disability carriers started going back to sex-distinct rates in 1994.
Like other disability insurers, The Guardian Life Insurance Co. of America went...