ORLANDO, FLA.--A consumer representative got a positive response from insurance regulators here when he urged them to create a model law requiring insurers to disclose data on the race, sex and income of persons to whom they sell home insurance.

Greg Squires, a sociology professor at George Washington University, spoke Saturday at the National Association of Insurance Commissioners meeting here. He said the type of information involved was already required of home mortgage lenders under the federal Home Mortgage Disclosure Act (HMDA).

Montana Insurance Commissioner John Morrison, chair of the Market Regulation and Consumer Affairs Committee, told Mr. Squires his panel "is discussing this. We're on top of this issue. It's bright on our radar screen."

He also agreed with Mr. Squires that the NAIC's having good, accurate data on such information "is essential."

Mr. Squires said the same kind of "sunshine" the federal law provides for the mortgage sector could also help the insurance industry.

The issue of transparency and data on insurance sales, Mr. Squires said, has taken on added importance in light of recent developments in the subprime mortgage market. He said this has spotlighted a greater need for transparency in provision of all financial services.

HMDA, Mr. Squires said, requires most mortgage lenders to disclose data on all applications, including race, gender and income of applicant, type and size of loan, and census tract.

According to his figures, HMDA and other fair lending laws have increasingly given access to credit to low-income and minority markets. From 1993 to 2000, in fact, the share to blacks increased from 3.8 percent to 6.6 percent. The share to Hispanics rose from 4 percent to 6.9 percent.

Mr. Squires added that the HMDA has helped lenders find new markets, assisted regulators in their efforts to monitor the market, and helped community groups to form partnerships with both lenders and regulators.

Obtaining the data on mortgages, he said, can enhance understanding of patterns and permit an increase in fairness and efficiency in the home loan market. "Such sunshine' can similarly help the insurance industry, he said.

Mr. Squires noted that concerns that release of such data would violate confidentiality of borrowers, reveal trade secrets or market strategies, and open the door to frivolous legislation have not been seen.

The information, he said, probably led to more voluntary partnerships among community groups and lenders, forestalling litigation that might otherwise have occurred.

About eight states have some form of geocoded public disclosure, but the data are very limited in terms of the geographic unit of analysis, product information and cities/states that are included.

He argued that such disclosure constitutes "a critical piece" needed for modernization and regulation of the U.S. financial service industries.

Mr. Squires appeared with Birny Birnbaum, representing the Center For Economic Justice. Mr. Birnbaum said some of the data of the type sought by Mr. Squires had actually been posted at one point for Nationwide insurance and there had been no ill effects on the company.

There is "no empirical evidence" to support arguments that the data would reveal insurers' trade secrets or lead to lawsuits, he said.

Speaking on a different issue, Mr. Birnbaum urged the commissioners to take action to assist policyholders who were victims of reckless subprime lending practices and also called for a three-year moratorium on the use of credit scoring to study its impact.

In reaction, Florida Insurance Commissioner Kevin McCarty wondered how regulators could take action on credit scoring, which he called the "heart and soul" of automobile underwriting." He asked whether a moratorium might not change the way insurers did business.

"That's the point," Mr. Birnbaum said, noting there was "no way insurers are going to be raising premiums for their most valuable customers."

His remarks angered David Snyder, American Insurance Association vice president and assistant general counsel, who said after the consumer session that what Mr. Birnbaum was seeking was not a moratorium but rather a backdoor ban "that would have a devastating effect."

Credit scores, he explained, are the basis for providing lower rates to drivers. What's more, 59 percent of policyholders pay less as a result of credit scoring, according to a Federal Trade Commission Study.

Special Reports /

Home Insurers' Income, Race Data Called For

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