Connecticut Senate Bill SB00237

Connecticut 2015 Regular Session

• Introduced: 1/21/15
• Refer: 1/21/15

Caption

An Act Prohibiting The Use Of Price Optimization By Automobile Insurance Companies.

Impact

If passed, the bill will amend Title 38a of the general statutes to ensure that any automobile insurance company using price optimization would face strict penalties. Specifically, if a company is found to have employed price optimization to set an insured's rate, they would be required to issue a rebate to the affected insured. This change is expected to enhance consumer protection and promote transparency in the pricing strategies of insurance companies.

Summary

SB00237 aims to prohibit automobile insurance companies from engaging in the practice of price optimization when setting rates for private passenger non-fleet automobile insurance. Traditionally, price optimization allows insurance companies to adjust rates based on an individual's likelihood of purchasing a policy, effectively penalizing certain demographics or risk categories. The bill seeks to create a fairer pricing structure for consumers by eliminating this practice, which is seen as discriminatory and exploitative.

Contention

There may be contention surrounding the enforcement and implications of SB00237. Supporters argue that price optimization is an unethical practice that disproportionately affects lower-income individuals and those in specific demographic groups. On the other hand, some stakeholders in the insurance industry may oppose the bill, stating that it limits their ability to assess risk appropriately and could lead to higher base rates for all consumers to offset losses from these restrictions. Financial implications for insurance companies and potential impacts on their pricing strategies could be the key discussion points among legislators and industry representatives.