I 

115TH CONGRESS 

2D SESSION H. R. 4885 

To require the Federal Insurance Office of the Department of the Treasury 

to conduct a study to identify disparities between communities in auto 

insurance costs and payout amounts based on the predominant racial 

makeup of such communities, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 25, 2018 

Mr. TAKANO (for himself, Mr. GONZALEZ of Texas, Ms. ROYBAL-ALLARD, Ms. 

NORTON, Ms. BASS, Ms. JACKSON LEE, and Mrs. WATSON COLEMAN) 

introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To require the Federal Insurance Office of the Department 

of the Treasury to conduct a study to identify disparities 

between communities in auto insurance costs and payout 

amounts based on the predominant racial makeup of 

such communities, and for other purposes. 

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 ‘‘Fair Auto Insurance 

5 Ratemaking Reporting to Allow a Transparent Evaluation 


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1 of Statistics Act of 2018’’ or the ‘‘FAIR RATES Act of 

2 2018’’. 

3 SEC. 2. DATA CALL. 

4 (a) IN GENERAL.—Pursuant to the authority under 

5 section 313(e) of title 31, United States Code, the Direc6 tor of the Federal Insurance Office shall collect from cov7 ered automobile insurers, aggregated on a census tract 

8 level basis based on the place of garaging of the insured 

9 vehicle, information for each of the three accident or cal10 endar years, as applicable, most recently completed as of 

11 the date of the enactment of this Act, regarding private 

12 passenger automobile insurance as the Director considers 

13 necessary to prepare the report required under section 3, 

14 which shall include the following information for each such 

15 year: 

16 (1) COMPANY NAME.—The name of the insur17 ance coverage for the vehicle. 

18 (2) EXPERIENCE YEAR.—The experience year 

19 for premiums and exposures. 

20 (3) CENSUS TRACT.—The census tract of the 

21 place of garaging of the insured vehicle. 

22 (4) PAID LOSS ADJUSTMENT EXPENSES.—Total 

23 paid loss adjustment expenses, reported by accident 

24 year. 


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1 (5) INCURRED LOSS ADJUSTMENT EXPENSES.— 

2 Total incurred loss adjustment expenses plus case 

3 reserves, reported by accident year. 

4 (6) COUNT OF CLAIMS RECORDED.—The num5 ber of claims reported for each coverage or type of 

6 loss, including claims that included payment and 

7 claims that did not include payment. 

8 (7) COUNT OF CLAIMS CLOSED.—The number 

9 of claims closed for each coverage or type of loss, in10 cluding claims that were closed that included pay11 ment and claims that were closed that did not in12 clude payment. 

13 (8) COVERAGE TYPE.—The type of coverage 

14 provided, including liability, personal injury protec15 tion, collision, comprehensive, and uninsured motor16 ist bodily injury. 

17 (9) PREMIUM WRITTEN.—Total premium writ18 ten, reported by coverage type. 

19 (10) PREMIUM EARNED.—Total premium 

20 earned, reported by coverage type. 

21 (11) EXPOSURE WRITTEN.—Total exposures 

22 written, reported by coverage type. 

23 (12) EXPOSURE EARNED.—Total exposures 

24 earned, reported by coverage type. 

25 (b) METHOD AND TIMING OF COLLECTION.— 


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1 (1) FROM FEDERAL OR STATE AGENCY.—Not 

2 later than the expiration of the 6-month period be3 ginning on the date of the enactment of this Act, the 

4 Director shall determine whether all of the informa5 tion required to be collected under subsection (a) 

6 can be obtained in the manner provided under the 

7 first sentence of section 313(e)(4) of title 31, United 

8 States Code, in a timely manner. If the Director de9 termines that all such information is available, and 

10 may be obtained by such manner in a timely man11 ner, the Director shall so obtain all such informa12 tion. 

13 (2) FROM INTERMEDIARY.—If the Director de14 termines under paragraph (1) that all of the infor15 mation required to be collected under subsection (a) 

16 cannot be obtained in the manner provided under 

17 the first sentence of section 313(e)(4) of title 31, 

18 United States Code, and in a timely manner, the Di19 rector shall provide that covered automobile insurers 

20 shall submit any such information that is not so ob21 tainable through— 

22 (A) an appropriate intermediary, including 

23 the National Association of Insurance Commis24 sioners; or 


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1 (B) other appropriate intermediaries, in2 cluding advisory organizations and statistical 

3 agents licensed by State insurance regulatory 

4 authorities. 

5 (3) FROM COVERED AUTOMOBILE INSURERS.— 

6 If the Director has not received all of the informa7 tion required to be collected under subsection (a) be8 fore the expiration of the 12-month period beginning 

9 on the date of the enactment of this Act, before the 

10 expiration of the 18-month period beginning upon 

11 such date of enactment, the Director shall collect 

12 from covered automobile insurers, in accordance 

13 with the penultimate sentence of section 313(e)(4) of 

14 title 31, United States Code, any such information 

15 not so received. 

16 SEC. 3. STUDY. 

17 (a) IN GENERAL.—The Director shall conduct a 

18 study, using the information collected pursuant to section 

19 2 and any other appropriate information available, to com20 pare private passenger automobile insurance premium 

21 costs and claims payment amounts to identify any dispari22 ties in such premium costs and claims payment amounts 

23 between coverage for automobiles garaged in census tracts 

24 and areas having a majority of residents who are racial 

25 minorities and coverage for automobiles garaged in census 


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1 tracts and areas having a majority of residents who are 

2 not racial minorities. Not later than the expiration of the 

3 24-month period beginning on the date of the enactment 

4 of this Act, the Director shall submit to the Congress a 

5 report containing the analysis, findings, and conclusions 

6 of the study under this section. 

7 (b) AVAILABILITY OF INFORMATION.—Upon submit8 ting the report to the Congress pursuant to subsection (a), 

9 the Director shall make publicly available all information 

10 collected pursuant to section 2 and all other information 

11 used in the conducting the study under this section, except 

12 that any information made publicly available may not con13 tain any personally identifiable information regarding in14 sureds under private passenger automobile insurance for 

15 which such information is collected. 

16 SEC. 4. DEFINITIONS. 

17 For purposes of this Act, the following definitions 

18 shall apply: 

19 (1) COVERED AUTOMOBILE INSURER.—The 

20 term ‘‘covered automobile insurer’’ means an insurer 

21 that— 

22 (A) has a statutory surplus attributable to 

23 private passenger automobile insurance cov24 erage, as of December 31, 2016, in an amount 

25 that exceeds $500,000,000; and 


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1 (B) annually collects more than 

2 $500,000,000 in premiums for private pas3 senger automobile insurance coverage. 

4 (2) DIRECTOR.—The term ‘‘Director’’ means 

5 the Director of the Federal Insurance Office of the 

6 Department of the Treasury. 

Æ 


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