N.J. Lawmakers To Discuss Auto Rating Issue

A New Jersey legislative panel will take up a controversial measure Monday that would prohibit auto insurers from using motorists' jobs or education to rate them as risks.

The bill up for discussion by the Senate Commerce Committee is sponsored by its chairperson, Sen. Nia H. Gill, D-Montclair. Her spokesman, Vince Matthews said the senator believes the use of education and occupation has a racially discriminatory and disparate impact.

Insurers have voiced strong opposition to the measure.

Mr. Gill said the Monday session, which follows a public hearing last June, will hear more testimony before a vote is called.

Mr. Gill could not say at this point if the measure has the support of enough senators to move it out of committee because all of the panel members have not committed themselves.

The committee hearing last June, heard Department of Banking and Insurance, New Jersey United Reciprocal Exchange, Government Employees Insurance Company (GEICO), New Jersey Citizen Action, Insurance Council of New Jersey (ICNJ), National Association of Mutual Insurance Companies (NAMIC) and Property Casualty Insurers Association of America.

GEICO, according to a recent article by Sen. Gill, charges a postal clerk with high school education 67 percent more than an administrator with a college degree. She noted that 82 percent of the state's African Americans and 87 percent of Latinos are without college degrees.

Richard Stokes, a lobbyist for PCI, said the industry would argue that taking away insurance companies underwriting freedom limits a competitive open marketplace and the bill is a step back from auto insurance reforms approved in 2003.

Limiting actuarially justified factors in rating he said will "stifle innovation and force consumers to pay more."

He noted that use of education and occupation has repeatedly been approved by state regulators.