Sponsors (3)
The bill strengthens anti-discrimination rules, transparency, and enforcement in auto insurance — giving consumers stronger recourse and clearer rules — but imposes new reporting, compliance, and litigation burdens that could raise premiums, complicate regulation, and squeeze smaller insurers.
Consumers (especially racial/ethnic minorities, women, and low-income drivers) are less likely to be charged higher rates or denied coverage based on race, gender, ZIP code, credit score, or other discriminatory factors.
Consumers, regulators, and advocates get greater transparency into underwriting, rate filings, loss-ratio calculations, and algorithmic impacts, improving public scrutiny and understanding of pricing practices.
Consumers gain stronger enforcement avenues — the FTC can enforce the law and seek civil penalties, state attorneys general can sue on behalf of residents, and private plaintiffs can recover damages and attorneys' fees for violations.
Many drivers (particularly middle- and low-income policyholders) could face higher premiums or reduced product availability as insurers raise prices or narrow offerings to cover compliance, reporting, litigation, and model-change costs.
Use of proxies like ZIP code, credit score, education, or census-tract indicators can perpetuate neighborhood- and race-based disparities in pricing, and many consumers may remain unaware that these non-driving traits affect their rates.
Public disclosure of underwriting rules and data/reporting requirements, plus higher compliance burdens, could expose proprietary methods, reduce pricing innovation, and disproportionately squeeze small or regional insurers, risking market consolidation and less competition.
Based on analysis of 7 sections of legislative text.
Prohibits auto insurers from using specified personal factors and income proxies for underwriting/ratings, requires FTC reporting and public rate disclosure, and establishes enforcement and private remedies.
Official title: To prohibit private passenger automobile insurers from using certain income proxies to determine insurance rates and eligibility.
Introduced May 29, 2025 by Bonnie Watson Coleman · Last progress May 29, 2025
Prohibits private passenger auto insurers and their affiliates from using certain personal characteristics and income-proxy variables (for example, ZIP code, credit score, education, occupation, homeownership, prior insurer) when determining eligibility or setting rates. Requires public disclosure of underwriting rules and rate filings, recurring reporting to the Federal Trade Commission to demonstrate practices and algorithms do not disparately impact protected groups, creates FTC enforcement authority and civil penalties, and gives consumers and state attorneys general private and parens patriae litigation rights. The Act takes effect one year after enactment.