Regulators travel to study racism in the insurance industries. Experts say that is not enough.

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A prominent group of insurance regulators agreed on Tuesday to take a closer look at the use of credit scores by companies in auto insurance pricing, a further step towards mastering a practice many experts consider as a form of economic racism.

Yet more state and federal activists pushing to outright ban the practice say the move falls far short of the progress on racial issues promised by the insurance industry in the wake of the murder. by George Floyd last summer.

Last year they said, ‘Let’s make a plan to work on this,’ and here we are a year later, and all they’ve done is vote on the topics they hope to cover. ‘ said Doug Heller, insurance expert at the Consumer Federation of America, a nonprofit advocacy group.

The National Association of Insurance Commissioners, a non-governmental regulatory body that guides the insurance industry, voted unanimously on Tuesday to adopt a broad package of measures to study the underlying causes of racial discrimination in the industry , including how the use of credit scores to determine rates disadvantages people of color.

This followed a vote on Sunday to endorse measures by the NAIC’s Special Committee on Race and Insurance, which was launched in July 2020, in response to Floyd’s murder, as businesses and leaders in the industry have joined the national conversation on how to tackle systemic and economic racism. .

Among the elements adopted was a binding measure for Commissioners to continue researching and analyzing insurance, legal and regulatory approaches to tackle unfair discrimination, disparate treatment, proxy discrimination and disparate impact, including including the dependence of auto insurers on formulas that include credit scores.

The measures also call on commissioners to develop analytical and regulatory tools “that would help the industry get rid of the practice of setting higher rates, including auto insurance rates, depending, in part, on credit. of a person, where a person lives, what level of education a person has completed and what job a person has all the factors that make people of color pay higher premiums.

The NAIC tasked the committee with making recommendations for legislative or regulatory changes, although a timeline for such action has not been set, an omission that has drawn the harshest criticism from consumer advocates. .

This is more of a wishlist of activities than a systematic approach to examining and resolving race and insurance issues, said Birny Birnbaum, executive director of the Center for Economic Justice, an advocacy group left-wing consumers studying insurance issues. Charges range from specific tasks to extensive surveys regardless of scope of activity, and do not specify delivery times.

Birnbaum, Heller and several others said they would have preferred to see a model bill that explicitly addresses bias and prohibits discriminatory variables.

Major auto insurance companies and trade groups have consistently championed their formulas that include credit, claiming its share of a more comprehensive, risk-based methodology based on research they believe shows better credit is correlated with fewer claims and accidents.

Spokesmen for Progressive, Allstate, Liberty Mutual and State Farm, the four largest auto insurers in the United States, did not respond to questions from NBC News.

A growing number of states have sought to ban the dependence of auto insurance providers on credit-based pricing, but the ability of states to do so depends on specific regulations that govern what factors can and cannot be taken. taken into account by insurers to determine tariffs.

Washington Insurance Commissioner Mike Kreidler, who earlier this year banned the use of credit-based pricing in auto insurance for three years through emergency executive action, said it This is why the measures adopted are, despite the “legitimate” criticisms, are significant.

“It’s an industry that has ignored the problem for years,” he said. “For NAIC, setting up a task force and coming back with anything is progress. “

Adam Edelman is a political reporter for NBC News.

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