Sponsors (3)
Introduced May 29, 2025 by Bonnie Watson Coleman · Last progress May 29, 2025
The bill increases transparency, anti-discrimination safeguards, and enforcement options in auto insurance but does so at the cost of added compliance, litigation, and operational burdens that could raise premiums, reduce offerings, and concentrate markets—particularly affecting low-income, minority, rural, and small-insurer stakeholders.
Millions of auto insurance consumers — especially racial/ethnic minorities, women, and low-income households — are less likely to be charged higher rates or denied coverage based on race, gender, ZIP Code, credit score, or other listed proxies.
Consumers and advocates gain much greater transparency because underwriting rules, rate filings, loss-ratio clarifications, and biennial algorithm data will be disclosed or available for regulatory review, making discriminatory practices easier to detect and challenge.
Consumers and states get stronger enforcement tools and remedies — the FTC can pursue civil penalties, state attorneys general can sue for restitution, and individuals can recover damages and attorneys' fees for willful or negligent violations — improving deterrence and redress.
Most policyholders — especially middle-class and low-income drivers — could face higher premiums or narrower product offerings as insurers raise prices or shrink offerings to offset compliance, reporting, litigation, and penalty costs.
Use of ZIP Code, census-tract, or other proxies can continue to produce racial and neighborhood disparities, and consumers may remain unaware that non-driving traits (education, credit score, residence) affect their rates, limiting their ability to shop or contest pricing.
Prohibitions or restrictions on common risk factors and public disclosure of underwriting could impair insurers' ability to price risk accurately, potentially forcing higher costs onto lower-risk drivers, reducing offerings in some areas (especially rural or high-risk markets), and harming market availability.
Based on analysis of 7 sections of legislative text.
Prohibits auto insurers from using many personal factors and income proxies (e.g., ZIP code, credit score, education, homeownership) in underwriting/rating and requires FTC reporting and public disclosures.
Prohibits private passenger auto insurers and their affiliates from using a long list of personal factors and income proxies (for example: ZIP code, credit score, education, occupation, homeownership, prior insurer, marital status) when deciding eligibility or setting premiums. Requires insurers to disclose underwriting rules and rate filings publicly, submit recurring reports to the Federal Trade Commission showing their practices and models do not disparately impact protected groups, and face FTC enforcement plus private and state enforcement remedies for violations. Creates new civil penalties and private rights of action, requires FTC rulemaking and periodic reporting, preserves state insurance regulation except where inconsistent with the Act, and becomes effective one year after enactment.