“Mindful of all the people I know who are gender-nonconforming, and the families I know with transgender children, I wanted to make sure that California continued to be a leader in gender-identity equality,” said Senate President Pro Tem Toni Atkins, who introduced the bill.
Lobbyists for insurance companies had been neutral on the bill, having received assurances that it would have no impact on auto insurance rates.
Rex Frazier, president of the Personal Insurance Federation of California, which represents several major auto insurance companies, said insurers were blindsided by Jones’ justification for the regulation, pointing out that none of the 10 legislative analyses of the bill made any mention of potential impacts on insurance rates.
“It is commonly understood that teenage male drivers are generally a higher risk than teenage female drivers,” Frazier said in a letter to the Department of Insurance. “Eliminating gender rating would require female teenage drivers to subsidize teenage male drivers.”
Frazier said the gender of teen drivers can result in an additional cost for boys or discount for girls of about 6 percent on their premiums. Drivers who list their gender as nonbinary probably would have been given a lower cost than boys, he said, though under the new rule, it's a moot point, as gender cannot be taken into account.
In a separate letter to the Insurance Department, the American Insurance Association, an insurance trade group, wrote: “Senate Bill 179 was designed to reduce barriers to existing name and gender change procedures. The bill was never intended, nor was it drafted, to affect established and demonstrated insurance rating factors such as gender.”
The association also cited a 2016 Insurance Institute report saying: “Men typically drive more miles than women and more often engage in risky driving practices, including not using safety belts, driving while impaired by alcohol, and speeding.”
In the rule-making process, Jones responded to the insurance groups by stating that “the Legislature may not have specifically intended to eliminate gender-based insurance rating” but that Atkins’ legislation had “relevance as a statement of California’s values around the role of gender in society.”
In an interview Tuesday, Jones said the “the real driver for the change was that there was really no consistency with regard to how insurers were using gender as a rating factor.” Additionally, he said, gender is “not a characteristic that is within your control.”
Atkins said in a statement Tuesday that her bill did not address the insurance-rate question, but that she supports “efforts to ensure that all genders are treated equally.”
“However, it’s imperative that these changes be made thoughtfully and with strong input from Californians,” Atkins statement said.
The advocacy group Consumer Watchdog had long advocated for the change, saying in a statement, “Gender and sex have no more place in what we pay for auto insurance than race or ethnicity do. These new rules will finally end gender-based discrimination in auto insurance pricing in California.”
Insurance companies must submit gender-neutral pricing policies to the Insurance Department by July 1. The new pricing would take effect after that.
Frazier has called on the Department of Insurance to at least permit insurance companies to take into account the age of drivers and new car safety features when setting rates. Decisions on those requests are pending.
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