I 

116TH CONGRESS 

1ST SESSION H. R. 3693 

To prohibit private passenger automobile insurers from using certain income 

proxies to determine insurance rates and eligibility. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 10, 2019 

Mrs. WATSON COLEMAN (for herself, Ms. TLAIB, Ms. BASS, Mr. 

BUTTERFIELD, Mr. BISHOP of Georgia, Ms. FUDGE, Ms. JOHNSON of 

Texas, Ms. PRESSLEY, Ms. NORTON, Ms. OMAR, Mr. THOMPSON of Mississippi, Ms. KELLY of Illinois, and Ms. OCASIO-CORTEZ) introduced the 

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

and in addition to the Committee on Energy and Commerce, for a period 

to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee 

concerned 

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’’. 


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1 SEC. 2. FINDINGS. 

2 Congress finds the following: 

3 (1) Private passenger automobile insurance 

4 companies are institutions which help spread risk of 

5 loss over a collective group of policyholders. 

6 (2) Private passenger automobile insurance is 

7 mandated in all States but New Hampshire. Legal 

8 penalties for operating a vehicle without liability in9 surance in these States range from fines, to license 

10 suspensions or revocations, to imprisonment. 

11 (3) The private passenger automobile insurance 

12 industry uses different variables to predict the over13 all costs and risks of drivers. The analysis and use 

14 of these variables ultimately help the automobile in15 surer set premium rates charged to consumers which 

16 the automobile insurer determines to be actuarially 

17 supported. 

18 (4) A pure loss ratio, a measurement of profit19 ability in insurance, is defined as losses divided by 

20 premiums. Statistical correlations between certain 

21 variables and pure loss ratios should be interpreted 

22 to mean that the selected variable relates to profit23 ability, but not necessarily to the risk that an indi24 vidual will get into an automobile accident. 

25 (5) A growing trend in the private passenger 

26 automobile insurance industry is to use income proxVerDate Sep 11 2014 00:18 Jul 20, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3693.IH H3693

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1 ies for underwriting and rating. The use of income 

2 proxies such as a driver’s education level, occupa3 tion, employment status, home ownership status, 

4 credit score, consumer report, previous insurer, and 

5 prior purchase of insurance by the industry as vari6 ables that significantly influence the insurance pre7 miums charged to drivers has become commonplace. 

8 Use of these income proxies in this fashion results 

9 in higher rates being charged to lower income driv10 ers while lower rates are being charged to the more 

11 affluent driver. 

12 (6) The American public is largely unaware 

13 that a person’s education level, occupation, employ14 ment status, home ownership status, credit score, 

15 consumer report, zip code, census tract, previous in16 surer, and prior purchase of insurance may be sig17 nificant factors used to determine eligibility for pre18 ferred auto insurance rates regardless of the per19 son’s driving history. As a result of the individual’s 

20 ineligibility for preferred rates, the driver’s policy 

21 and rate will be only offered from an affiliate com22 pany that has higher rates. 


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1 SEC. 3. REQUIREMENTS FOR PRIVATE PASSENGER AUTO2 MOBILE INSURERS. 

3 (a) USE OF CERTAIN FACTORS AND INCOME PROX4 IES PROHIBITED.—It shall be unlawful for a private pas5 senger automobile insurer, or any of its affiliate insurers, 

6 to take into consideration any of the factors described in 

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

8 consumer’s eligibility for automobile insurance or in calcu9 lating the rate for that consumer. 

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

11 (a) are— 

12 (1) gender; 

13 (2) level of education; 

14 (3) occupation; 

15 (4) employment status; 

16 (5) home ownership status; 

17 (6) zip code or adjacent zip codes; 

18 (7) census tract; 

19 (8) marital status; 

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

21 (10) consumer report; 

22 (11) previous insurer; or 

23 (12) prior purchase of insurance of a consumer 

24 from that automobile insurer. 

25 (c) PUBLIC AVAILABILITY OF INFORMATION.—All 

26 underwriting rules and rate filings for use by any private 


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1 passenger automobile insurer shall be available for public 

2 inspection and may not be considered proprietary trade 

3 secret information. 

4 (d) REASONABLE PROCEDURES TO ASSURE COMPLI5 ANCE.—No person shall be held liable for any violation 

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

7 evidence that at the time of the alleged violation the per8 son maintained reasonable procedures to assure compli9 ance with the provisions of this Act. 

10 (e) RULES OF CONSTRUCTION.— 

11 (1) FACTORS AND METHODS INFLUENCING

12 PREMIUMS.—For the purposes of this Act, a viola13 tion of subsection (a) shall be considered to have oc14 curred whenever the consideration of any of the fac15 tors described in subsection (b) prevents the con16 sumer from obtaining insurance at the lowest rate 

17 available to the consumer from a private passenger 

18 automobile insurer or any of its affiliates. Actions 

19 considered a violation of such subsection include the 

20 usage or consideration of any such factor resulting 

21 in— 

22 (A) the determination of a consumer’s eli23 gibility for automobile insurance or the calcula24 tion of the rate for that consumer; 


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1 (B) an action which prevents a consumer 

2 from receiving certain rebates or discounts; 

3 (C) an action which prevents a consumer 

4 from obtaining insurance from an automobile 

5 insurer or any of its affiliate companies; 

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

7 change in policy or coverage terms; or 

8 (E) any other impact on a consumer’s pre9 mium for insurance. 

10 (2) AUTHORITY OF FEDERAL AND STATE AGEN11 CIES.—Nothing in this Act is intended to affect the 

12 authority of any Federal or State agency to enforce 

13 a prohibition against unfair or deceptive acts or 

14 practices, including the making of false or mis15 leading statements in connection with a credit or in16 surance transaction that is not initiated by the con17 sumer. 

18 SEC. 4. ENFORCEMENT. 

19 (a) ENFORCEMENT BY FEDERAL TRADE COMMIS20 SION.— 

21 (1) UNFAIR OR DECEPTIVE ACTS OR PRAC22 TICES.—A violation of this Act shall be treated as 

23 an unfair and deceptive act or practice proscribed 

24 under section 5 of the Federal Trade Commission 

25 Act (15 U.S.C. 57a(a)(1)(B)). 


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1 (2) POWERS OF COMMISSION.—The Federal 

2 Trade Commission shall enforce this Act in the same 

3 manner, by the same means, and with the same ju4 risdiction, powers, and duties as though all applica5 ble terms and provisions of the Federal Trade Com6 mission Act (15 U.S.C. 41 et seq.) were incor7 porated into and made a part of this Act. Any per8 son who violates this Act shall be subject to the pen9 alties and entitled to the privileges and immunities 

10 provided in the Federal Trade Commission Act. 

11 (3) AMOUNT OF PENALTY.—Notwithstanding 

12 the penalties set forth in section 5 of such Act, a 

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

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

15 (4) REGULATIONS.—The Federal Trade Com16 mission shall prescribe, in accordance with section 

17 553 of title 5, United States Code, such regulations 

18 as are necessary to carry out the purposes of this 

19 Act, including regulations as may be necessary or 

20 appropriate to administer and carry out the pur21 poses and objectives of this Act, and to prevent eva22 sions thereof or to facilitate compliance therewith. 

23 (b) ACTIONS BY CONSUMERS.— 

24 (1) WILLFUL VIOLATIONS.—Any private pas25 senger automobile insurer who willfully violates this 


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1 Act with respect to any consumer is liable to that 

2 consumer in an amount equal to the sum of— 

3 (A) any actual damages sustained by the 

4 consumer as a result of the failure; 

5 (B) such amount of punitive damages as 

6 the court may allow; and 

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

8 enforce any liability under this paragraph, the 

9 costs of the action together with reasonable at10 torneys’ fees as determined by the court. 

11 (2) NEGLIGENT VIOLATIONS.—Any private pas12 senger automobile insurer who is negligent in failing 

13 to comply with any requirement imposed under this 

14 Act with respect to any consumer is liable to that 

15 consumer in an amount equal to the sum of— 

16 (A) any actual damages sustained by the 

17 consumer as a result of the failure; and 

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

19 enforce any liability under this paragraph, the 

20 costs of the action together with reasonable at21 torneys’ fees as determined by the court. 

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

23 court that an unsuccessful pleading, motion, or other 

24 paper filed in connection with an action under this 

25 subsection was filed in bad faith or for purposes of 


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1 harassment, the court shall award to the prevailing 

2 party attorney’s fees reasonable in relation to the 

3 work expended in responding to the pleading, mo4 tion, or other paper. 

5 (4) JURISDICTION OF COURTS; LIMITATION OF

6 ACTIONS.—An action to enforce any liability created 

7 under this subsection may be brought in any appro8 priate United States district court, without regard to 

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

10 competent jurisdiction, not later than the earlier 

11 of— 

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

13 the plaintiff of the violation that is the basis for 

14 such liability; or 

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

16 violation that is the basis for such liability oc17 curs. 

18 (c) ACTIONS BY STATES.— 

19 (1) IN GENERAL.—In any case in which the at20 torney general of a State, or an official or agency of 

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

22 residents of such State has been or is threatened or 

23 adversely affected by an act or practice in violation 

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

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


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1 in an appropriate State court or an appropriate dis2 trict court of the United States to— 

3 (A) enjoin such act or practice; 

4 (B) enforce compliance with this Act; 

5 (C) obtain damages, restitution, or other 

6 compensation on behalf of residents of the 

7 State; or 

8 (D) obtain such other legal and equitable 

9 relief as the court may consider to be appro10 priate. 

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

12 subsection, the attorney general, official, or agency 

13 of the State involved shall provide to the Federal 

14 Trade Commission a written notice of such action 

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

16 attorney general, official, or agency determines that 

17 it is not feasible to provide the notice described in 

18 this paragraph before the filing of the action, the at19 torney general, official, or agency shall provide writ20 ten notice of the action and a copy of the complaint 

21 to the Federal Trade Commission immediately upon 

22 the filing of the action. 

23 (3) AUTHORITY OF FEDERAL TRADE COMMIS24 SION.—On receiving notice under paragraph (2) of 


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1 an action under this subsection, the Federal Trade 

2 Commission shall have the right— 

3 (A) to intervene in the action; 

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

5 matters arising therein; and 

6 (C) to file petitions for appeal. 

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

8 bringing a civil action under this subsection, nothing 

9 in this Act shall be construed to prevent an attorney 

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

11 the powers conferred on the attorney general, offi12 cial, or agency by the laws of such State to conduct 

13 investigations, administer oaths and affirmations, or 

14 compel the attendance of witnesses or the production 

15 of documentary and other evidence. 

16 SEC. 5. RELATION TO STATE LAW. 

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

18 person subject to the provisions of this Act from complying 

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

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

21 prevention or mitigation of identity theft, or the regulation 

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

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

24 and then only to the extent of the inconsistency. 


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1 SEC. 6. DEFINITIONS. 

2 For the purposes of this Act, the following definitions 

3 apply: 

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

5 entity that, directly or indirectly, through one or 

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

7 under common control with another entity. For pur8 poses of this paragraph, the term ‘‘control’’ means 

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

10 direct or cause the direction of the management and 

11 policies of the entity, whether— 

12 (A) through the ownership of voting securi13 ties; 

14 (B) by contract other than a commercial 

15 contract for goods or non-management services; 

16 (C) by contract for goods or non-manage17 ment services where the volume of activity re18 sults in a reliance relationship; or 

19 (D) by common management. 

20 Control shall be presumed to exist if an entity and 

21 its affiliates directly or indirectly own, control, hold 

22 with the power to vote, or hold proxies representing 

23 10 percent or more of the voting interests of an enti24 ty. 

25 (2) AUTOMOBILE INSURER.—The term ‘‘auto26 mobile insurer’’ means an insurer authorized to 


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1 transact or transacting automobile insurance, motor 

2 vehicle insurance, automobile or motor vehicle liabil3 ity insurance, or any similar insurance business in 

4 the United States. 

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

6 means any small, relatively permanent statistical 

7 subdivision of a county, as used by the United 

8 States Census Bureau. 

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

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

11 603 of the Fair Credit Reporting Act (15 U.S.C. 

12 1681a), except that such term does not include any 

13 communication to the extent such communication re14 lates to the driving history or place of residence of 

15 a consumer. 

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

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

18 based in whole or in part on a consumer’s credit in19 formation used in underwriting and rating of con20 sumers that takes into account certain elements of 

21 an individual’s credit history to predict how likely 

22 such individual is to have an insurance loss. 

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

24 has the meaning given such term in section 


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1 609(f)(2) of the Fair Credit Reporting Act (15 

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

3 (7) EMPLOYMENT STATUS.—The term ‘‘employ4 ment status’’ means a consumer’s status as a cur5 rent full-time employee, part-time employee, em6 ployed, unemployed, underemployed, or any other 

7 such designation which indicates a consumer’s work 

8 status. 

9 (8) HOME OWNERSHIP STATUS.—The term 

10 ‘‘home ownership status’’ refers to whether a con11 sumer currently owns any real property which may 

12 be used as a residence. 

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

14 education’’ refers to the highest grade level com15 pleted in a secondary school or trade school, a pro16 fessional licensure or certification, or the highest un17 dergraduate or graduate college degree obtained. 

18 Such term does not include the completion of a traf19 fic safety course or scholastic achievement while en20 rolled in a school, college, or university. 

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

22 means a consumer’s current lawful employment posi23 tion in a career or identifiable trade category. 

24 (11) PRIVATE PASSENGER AUTOMOBILE.—The 

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


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1 wheel motor vehicle, whether owned or leased to an 

2 individual or individuals, and that is of a private 

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

4 vehicle with a pickup body, a delivery sedan, a pas5 senger van, a sports utility vehicle, or a panel truck 

6 or a camper type vehicle, and that— 

7 (A) is not used as a public or livery con8 veyance for passengers; 

9 (B) is not rented to others; 

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

11 15,000 pounds; and 

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

13 an occupation, profession, or business of a per14 son other than farming or ranching. 

15 Such term includes a motor vehicle owned by a farm 

16 family co-partnership or farm family corporation, 

17 which is principally garaged on a farm or ranch and 

18 otherwise meets the definition contained in this 

19 paragraph. 

20 SEC. 7. EFFECTIVE DATE. 

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

22 enactment of this Act. 

Æ 


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