II 

116TH CONGRESS 

2D SESSION S. 4755 

To prohibit private passenger automobile insurers from using certain income 

proxies to determine insurance rates and eligibility. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 29, 2020 

Mr. BOOKER introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To prohibit private passenger automobile insurers from using 

certain income proxies to determine insurance rates and 

eligibility. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Prohibit Auto Insur5 ance Discrimination Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) Private passenger automobile insurance 

9 companies are institutions which help spread risk of 

10 loss over a collective group of policyholders. 


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1 (2) Private passenger automobile insurance is 

2 mandated in all States but New Hampshire. Legal 

3 penalties for operating a vehicle without liability in4 surance in these States range from fines, to license 

5 suspensions or revocations, to imprisonment. 

6 (3) The private passenger automobile insurance 

7 industry uses different variables to predict the over8 all costs and risks of drivers. The analysis and use 

9 of these variables ultimately help the automobile in10 surer set premium rates charged to consumers which 

11 the automobile insurer determines to be actuarially 

12 supported. 

13 (4) A pure loss ratio, a measurement of profit14 ability in insurance, is defined as losses divided by 

15 premiums. Statistical correlations between certain 

16 variables and pure loss ratios should be interpreted 

17 to mean that the selected variable relates to profit18 ability, but not necessarily to the risk that an indi19 vidual will get into an automobile accident. 

20 (5) A growing trend in the private passenger 

21 automobile insurance industry is to use income prox22 ies for underwriting and rating. The use of income 

23 proxies such as a driver’s education level, occupa24 tion, employment status, home ownership status, 

25 credit score, consumer report, previous insurer, and 


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1 prior purchase of insurance by the industry as vari2 ables that significantly influence the insurance pre3 miums charged to drivers has become commonplace. 

4 Use of these income proxies in this fashion results 

5 in higher rates being charged to lower income driv6 ers while lower rates are being charged to the more 

7 affluent driver. 

8 (6) The American public is largely unaware 

9 that a person’s education level, occupation, employ10 ment status, home ownership status, credit score, 

11 consumer report, zip code, census tract, previous in12 surer, and prior purchase of insurance may be sig13 nificant factors used to determine eligibility for pre14 ferred auto insurance rates regardless of the per15 son’s driving history. As a result of the individual’s 

16 ineligibility for preferred rates, the driver’s policy 

17 and rate will be only offered from an affiliate com18 pany that has higher rates. 

19 SEC. 3. REQUIREMENTS FOR PRIVATE PASSENGER AUTO20 MOBILE INSURERS. 

21 (a) USE OF CERTAIN FACTORS AND INCOME PROX22 IES PROHIBITED.—It shall be unlawful for a private pas23 senger automobile insurer, or any of its affiliate insurers, 

24 to take into consideration any of the factors described in 

25 subsection (b) relating to a consumer in determining that 


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1 consumer’s eligibility for automobile insurance or in calcu2 lating the rate for that consumer. 

3 (b) FACTORS.—The factors referred to in subsection 

4 (a) are— 

5 (1) gender; 

6 (2) level of education; 

7 (3) occupation; 

8 (4) employment status; 

9 (5) home ownership status; 

10 (6) zip code or adjacent zip codes; 

11 (7) census tract; 

12 (8) marital status; 

13 (9) credit score or credit-based insurance score; 

14 (10) consumer report; 

15 (11) previous insurer; or 

16 (12) prior purchase of insurance of a consumer 

17 from that automobile insurer. 

18 (c) PUBLIC AVAILABILITY OF INFORMATION.—All 

19 underwriting rules and rate filings for use by any private 

20 passenger automobile insurer shall be available for public 

21 inspection and may not be considered proprietary trade 

22 secret information. 

23 (d) REASONABLE PROCEDURES TO ASSURE COMPLI24 ANCE.—No person shall be held liable for any violation 

25 of this Act if the person shows by a preponderance of the 


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1 evidence that at the time of the alleged violation the per2 son maintained reasonable procedures to assure compli3 ance with the provisions of this Act. 

4 (e) RULES OF CONSTRUCTION.— 

5 (1) FACTORS AND METHODS INFLUENCING

6 PREMIUMS.—For the purposes of this Act, a viola7 tion of subsection (a) shall be considered to have oc8 curred whenever the consideration of any of the fac9 tors described in subsection (b) prevents the con10 sumer from obtaining insurance at the lowest rate 

11 available to the consumer from a private passenger 

12 automobile insurer or any of its affiliates. Actions 

13 considered a violation of such subsection include the 

14 usage or consideration of any such factor resulting 

15 in— 

16 (A) the determination of a consumer’s eli17 gibility for automobile insurance or the calcula18 tion of the rate for that consumer; 

19 (B) an action which prevents a consumer 

20 from receiving certain rebates or discounts; 

21 (C) an action which prevents a consumer 

22 from obtaining insurance from an automobile 

23 insurer or any of its affiliate companies; 

24 (D) a denial, cancellation, non-renewal, or 

25 change in policy or coverage terms; or 


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1 (E) any other impact on a consumer’s pre2 mium for insurance. 

3 (2) AUTHORITY OF FEDERAL AND STATE AGEN4 CIES.—Nothing in this Act is intended to affect the 

5 authority of any Federal or State agency to enforce 

6 a prohibition against unfair or deceptive acts or 

7 practices, including the making of false or mis8 leading statements in connection with a credit or in9 surance transaction that is not initiated by the con10 sumer. 

11 SEC. 4. ENFORCEMENT. 

12 (a) ENFORCEMENT BY FEDERAL TRADE COMMIS13 SION.— 

14 (1) UNFAIR OR DECEPTIVE ACTS OR PRAC15 TICES.—A violation of this Act shall be treated as 

16 a violation of a rule defining an unfair or deceptive 

17 act or practice under section 18(a)(1)(B) of the Fed18 eral Trade Commission Act (15 U.S.C. 

19 57a(a)(1)(B)). 

20 (2) POWERS OF COMMISSION.—The Federal 

21 Trade Commission shall enforce this Act in the same 

22 manner, by the same means, and with the same ju23 risdiction, powers, and duties as though all applica24 ble terms and provisions of the Federal Trade Com25 mission Act (15 U.S.C. 41 et seq.) were incorVerDate Sep 11 2014 03:29 Oct 17, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4755.IS S4755

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1 porated into and made a part of this Act. Any per2 son who violates this Act shall be subject to the pen3 alties and entitled to the privileges and immunities 

4 provided in the Federal Trade Commission Act. 

5 (3) AMOUNT OF PENALTY.—Notwithstanding 

6 the penalties set forth in section 18 of such Act, a 

7 person who violates this Act shall be liable for a civil 

8 penalty of not less than $2,500 per violation. 

9 (4) REGULATIONS.—The Federal Trade Com10 mission shall prescribe, in accordance with section 

11 553 of title 5, United States Code, such regulations 

12 as are necessary to carry out the purposes of this 

13 Act, including regulations as may be necessary or 

14 appropriate to administer and carry out the pur15 poses and objectives of this Act, and to prevent eva16 sions thereof or to facilitate compliance therewith. 

17 (b) ACTIONS BY CONSUMERS.— 

18 (1) WILLFUL VIOLATIONS.—Any private pas19 senger automobile insurer who willfully violates this 

20 Act with respect to any consumer is liable to that 

21 consumer in an amount equal to the sum of— 

22 (A) any actual damages sustained by the 

23 consumer as a result of the failure; 

24 (B) such amount of punitive damages as 

25 the court may allow; and 


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1 (C) in the case of any successful action to 

2 enforce any liability under this paragraph, the 

3 costs of the action together with reasonable at4 torneys’ fees as determined by the court. 

5 (2) NEGLIGENT VIOLATIONS.—Any private pas6 senger automobile insurer who is negligent in failing 

7 to comply with any requirement imposed under this 

8 Act with respect to any consumer is liable to that 

9 consumer in an amount equal to the sum of— 

10 (A) any actual damages sustained by the 

11 consumer as a result of the failure; and 

12 (B) in the case of any successful action to 

13 enforce any liability under this paragraph, the 

14 costs of the action together with reasonable at15 torneys’ fees as determined by the court. 

16 (3) ATTORNEYS’ FEES.—Upon a finding by the 

17 court that an unsuccessful pleading, motion, or other 

18 paper filed in connection with an action under this 

19 subsection was filed in bad faith or for purposes of 

20 harassment, the court shall award to the prevailing 

21 party attorney’s fees reasonable in relation to the 

22 work expended in responding to the pleading, mo23 tion, or other paper. 

24 (4) JURISDICTION OF COURTS; LIMITATION OF

25 ACTIONS.—An action to enforce any liability created 


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1 under this subsection may be brought in any appro2 priate United States district court, without regard to 

3 the amount in controversy, or in any other court of 

4 competent jurisdiction, not later than the earlier 

5 of— 

6 (A) 2 years after the date of discovery by 

7 the plaintiff of the violation that is the basis for 

8 such liability; or 

9 (B) 5 years after the date on which the 

10 violation that is the basis for such liability oc11 curs. 

12 (c) ACTIONS BY STATES.— 

13 (1) IN GENERAL.—In any case in which the at14 torney general of a State, or an official or agency of 

15 a State, has reason to believe that an interest of the 

16 residents of such State has been or is threatened or 

17 adversely affected by an act or practice in violation 

18 of this Act, the State, as parens patriae, may bring 

19 a civil action on behalf of the residents of the State 

20 in an appropriate State court or an appropriate dis21 trict court of the United States to— 

22 (A) enjoin such act or practice; 

23 (B) enforce compliance with this Act; 


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1 (C) obtain damages, restitution, or other 

2 compensation on behalf of residents of the 

3 State; or 

4 (D) obtain such other legal and equitable 

5 relief as the court may consider to be appro6 priate. 

7 (2) NOTICE.—Before filing an action under this 

8 subsection, the attorney general, official, or agency 

9 of the State involved shall provide to the Federal 

10 Trade Commission a written notice of such action 

11 and a copy of the complaint for such action. If the 

12 attorney general, official, or agency determines that 

13 it is not feasible to provide the notice described in 

14 this paragraph before the filing of the action, the at15 torney general, official, or agency shall provide writ16 ten notice of the action and a copy of the complaint 

17 to the Federal Trade Commission immediately upon 

18 the filing of the action. 

19 (3) AUTHORITY OF FEDERAL TRADE COMMIS20 SION.—On receiving notice under paragraph (2) of 

21 an action under this subsection, the Federal Trade 

22 Commission shall have the right— 

23 (A) to intervene in the action; 

24 (B) upon so intervening, to be heard on all 

25 matters arising therein; and 


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1 (C) to file petitions for appeal. 

2 (4) RULE OF CONSTRUCTION.—For purposes of 

3 bringing a civil action under this subsection, nothing 

4 in this Act shall be construed to prevent an attorney 

5 general, official, or agency of a State from exercising 

6 the powers conferred on the attorney general, offi7 cial, or agency by the laws of such State to conduct 

8 investigations, administer oaths and affirmations, or 

9 compel the attendance of witnesses or the production 

10 of documentary and other evidence. 

11 SEC. 5. RELATION TO STATE LAW. 

12 This Act does not annul, alter, affect, or exempt any 

13 person subject to the provisions of this Act from complying 

14 with the laws of any State with respect to the collection, 

15 distribution, or use of any information on consumers, the 

16 prevention or mitigation of identity theft, or the regulation 

17 of the business of insurance, except to the extent that 

18 those laws are inconsistent with any provision of this Act, 

19 and then only to the extent of the inconsistency. 

20 SEC. 6. DEFINITIONS. 

21 For the purposes of this Act, the following definitions 

22 apply: 

23 (1) AFFILIATE.—The term ‘‘affiliate’’ means an 

24 entity that, directly or indirectly, through one or 

25 more intermediaries, controls, is controlled by, or is 


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1 under common control with another entity. For pur2 poses of this paragraph, the term ‘‘control’’ means 

3 the possession, directly or indirectly, of the power to 

4 direct or cause the direction of the management and 

5 policies of the entity, whether— 

6 (A) through the ownership of voting securi7 ties; 

8 (B) by contract other than a commercial 

9 contract for goods or non-management services; 

10 (C) by contract for goods or non-manage11 ment services where the volume of activity re12 sults in a reliance relationship; or 

13 (D) by common management. 

14 Control shall be presumed to exist if an entity and 

15 its affiliates directly or indirectly own, control, hold 

16 with the power to vote, or hold proxies representing 

17 10 percent or more of the voting interests of an enti18 ty. 

19 (2) AUTOMOBILE INSURER.—The term ‘‘auto20 mobile insurer’’ means an insurer authorized to 

21 transact or transacting automobile insurance, motor 

22 vehicle insurance, automobile or motor vehicle liabil23 ity insurance, or any similar insurance business in 

24 the United States. 


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1 (3) CENSUS TRACT.—The term ‘‘census tract’’ 

2 means any small, relatively permanent statistical 

3 subdivision of a county, as used by the United 

4 States Census Bureau. 

5 (4) CONSUMER REPORT.—The term ‘‘consumer 

6 report’’ has the meaning given such term in section 

7 603 of the Fair Credit Reporting Act (15 U.S.C. 

8 1681a), except that such term does not include any 

9 communication to the extent such communication re10 lates to the driving history or place of residence of 

11 a consumer. 

12 (5) CREDIT-BASED INSURANCE SCORE.—The 

13 term ‘‘credit-based insurance score’’ means a rating 

14 based in whole or in part on a consumer’s credit in15 formation used in underwriting and rating of con16 sumers that takes into account certain elements of 

17 an individual’s credit history to predict how likely 

18 such individual is to have an insurance loss. 

19 (6) CREDIT SCORE.—The term ‘‘credit score’’ 

20 has the meaning given such term in section 

21 609(f)(2) of the Fair Credit Reporting Act (15 

22 U.S.C. 1681g(f)(2)). 

23 (7) EMPLOYMENT STATUS.—The term ‘‘employ24 ment status’’ means a consumer’s status as a cur25 rent full-time employee, part-time employee, emVerDate Sep 11 2014 03:29 Oct 17, 2020 Jkt 019200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S4755.IS S4755

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1 ployed, unemployed, underemployed, or any other 

2 such designation which indicates a consumer’s work 

3 status. 

4 (8) HOME OWNERSHIP STATUS.—The term 

5 ‘‘home ownership status’’ refers to whether a con6 sumer currently owns any real property which may 

7 be used as a residence. 

8 (9) LEVEL OF EDUCATION.—The term ‘‘level of 

9 education’’ refers to the highest grade level com10 pleted in a secondary school or trade school, a pro11 fessional licensure or certification, or the highest un12 dergraduate or graduate college degree obtained. 

13 Such term does not include the completion of a traf14 fic safety course or scholastic achievement while en15 rolled in a school, college, or university. 

16 (10) OCCUPATION.—The term ‘‘occupation’’ 

17 means a consumer’s current lawful employment posi18 tion in a career or identifiable trade category. 

19 (11) PRIVATE PASSENGER AUTOMOBILE.—The 

20 term ‘‘private passenger automobile’’ means a 4- 

21 wheel motor vehicle, whether owned or leased to an 

22 individual or individuals, and that is of a private 

23 passenger or station wagon type, or that is a motor 

24 vehicle with a pickup body, a delivery sedan, a pasVerDate Sep 11 2014 03:29 Oct 17, 2020 Jkt 019200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\S4755.IS S4755

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1 senger van, a sports utility vehicle, or a panel truck 

2 or a camper type vehicle, and that— 

3 (A) is not used as a public or livery con4 veyance for passengers; 

5 (B) is not rented to others; 

6 (C) has a gross vehicle weight of less than 

7 15,000 pounds; and 

8 (D) is not primarily used in the course of 

9 an occupation, profession, or business of a per10 son other than farming or ranching. 

11 Such term includes a motor vehicle owned by a farm 

12 family co-partnership or farm family corporation, 

13 which is principally garaged on a farm or ranch and 

14 otherwise meets the definition contained in this 

15 paragraph. 

16 SEC. 7. EFFECTIVE DATE. 

17 This Act shall take effect 1 year after the date of 

18 enactment of this Act. 

Æ 


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