FAIR RATES Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 2684 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 MAY 10, 2019 Mr. TAKANO 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. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Fair Auto Insurance 4 Ratemaking Reporting to Allow a Transparent Evaluation 5 of Statistics Act of 2019’’ or the ‘‘FAIR RATES Act of 6 2019’’. 7 VerDate Sep 11 2014 19:04 May 21, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2684.IH H2684 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 2684 IH SEC. 2. DATA CALL. 1 (a) IN GENERAL.—Pursuant to the authority under 2 section 313(e) of title 31, United States Code, the Direc- 3 tor of the Federal Insurance Office shall collect from cov- 4 ered automobile insurers, aggregated on a census tract 5 level basis based on the place of garaging of the insured 6 vehicle, information for each of the three accident or cal- 7 endar years, as applicable, most recently completed as of 8 the date of the enactment of this Act, regarding private 9 passenger automobile insurance as the Director considers 10 necessary to prepare the report required under section 3, 11 which shall include the following information for each such 12 year: 13 (1) COMPANY NAME.—The name of the insur- 14 ance coverage for the vehicle. 15 (2) EXPERIENCE YEAR.—The experience year 16 for premiums and exposures. 17 (3) CENSUS TRACT.—The census tract of the 18 place of garaging of the insured vehicle. 19 (4) PAID LOSS ADJUSTMENT EXPENSES.—Total 20 paid loss adjustment expenses, reported by accident 21 year. 22 (5) INCURRED LOSS ADJUSTMENT EXPENSES.— 23 Total incurred loss adjustment expenses plus case 24 reserves, reported by accident year. 25 VerDate Sep 11 2014 19:04 May 21, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2684.IH H2684 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 2684 IH (6) COUNT OF CLAIMS RECORDED.—The num- 1 ber of claims reported for each coverage or type of 2 loss, including claims that included payment and 3 claims that did not include payment. 4 (7) COUNT OF CLAIMS CLOSED.—The number 5 of claims closed for each coverage or type of loss, in- 6 cluding claims that were closed that included pay- 7 ment and claims that were closed that did not in- 8 clude payment. 9 (8) COVERAGE TYPE.—The type of coverage 10 provided, including liability, personal injury protec- 11 tion, collision, comprehensive, and uninsured motor- 12 ist bodily injury. 13 (9) PREMIUM WRITTEN.—Total premium writ- 14 ten, reported by coverage type. 15 (10) PREMIUM EARNED.—Total premium 16 earned, reported by coverage type. 17 (11) EXPOSURE WRITTEN.—Total exposures 18 written, reported by coverage type. 19 (12) EXPOSURE EARNED.—Total exposures 20 earned, reported by coverage type. 21 (b) METHOD AND TIMING OF COLLECTION.— 22 (1) FROM FEDERAL OR STATE AGENCY.—Not 23 later than the expiration of the 6-month period be- 24 ginning on the date of the enactment of this Act, the 25 VerDate Sep 11 2014 19:04 May 21, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2684.IH H2684 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 2684 IH Director shall determine whether all of the informa- 1 tion required to be collected under subsection (a) 2 can be obtained in the manner provided under the 3 first sentence of section 313(e)(4) of title 31, United 4 States Code, in a timely manner. If the Director de- 5 termines that all such information is available, and 6 may be obtained by such manner in a timely man- 7 ner, the Director shall so obtain all such informa- 8 tion. 9 (2) FROM INTERMEDIARY.—If the Director de- 10 termines under paragraph (1) that all of the infor- 11 mation required to be collected under subsection (a) 12 cannot be obtained in the manner provided under 13 the first sentence of section 313(e)(4) of title 31, 14 United States Code, and in a timely manner, the Di- 15 rector shall provide that covered automobile insurers 16 shall submit any such information that is not so ob- 17 tainable through— 18 (A) an appropriate intermediary, including 19 the National Association of Insurance Commis- 20 sioners; or 21 (B) other appropriate intermediaries, in- 22 cluding advisory organizations and statistical 23 agents licensed by State insurance regulatory 24 authorities. 25 VerDate Sep 11 2014 19:04 May 21, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2684.IH H2684 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 2684 IH (3) FROM COVERED AUTOMOBILE INSURERS.— 1 If the Director has not received all of the informa- 2 tion required to be collected under subsection (a) be- 3 fore the expiration of the 12-month period beginning 4 on the date of the enactment of this Act, before the 5 expiration of the 18-month period beginning upon 6 such date of enactment, the Director shall collect 7 from covered automobile insurers, in accordance 8 with the penultimate sentence of section 313(e)(4) of 9 title 31, United States Code, any such information 10 not so received. 11 SEC. 3. STUDY. 12 (a) IN GENERAL.—The Director shall conduct a 13 study, using the information collected pursuant to section 14 2 and any other appropriate information available, to com- 15 pare private passenger automobile insurance premium 16 costs and claims payment amounts to identify any dispari- 17 ties in such premium costs and claims payment amounts 18 between coverage for automobiles garaged in census tracts 19 and areas having a majority of residents who are racial 20 minorities and coverage for automobiles garaged in census 21 tracts and areas having a majority of residents who are 22 not racial minorities. Not later than the expiration of the 23 24-month period beginning on the date of the enactment 24 of this Act, the Director shall submit to the Congress a 25 VerDate Sep 11 2014 19:04 May 21, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2684.IH H2684 pamtmann on DSKBFK8HB2PROD with BILLS 6 •HR 2684 IH report containing the analysis, findings, and conclusions 1 of the study under this section. 2 (b) AVAILABILITY OF INFORMATION.—Upon submit- 3 ting the report to the Congress pursuant to subsection (a), 4 the Director shall make publicly available all information 5 collected pursuant to section 2 and all other information 6 used in the conducting the study under this section, except 7 that any information made publicly available may not con- 8 tain any personally identifiable information regarding in- 9 sureds under private passenger automobile insurance for 10 which such information is collected. 11 SEC. 4. DEFINITIONS. 12 For purposes of this Act, the following definitions 13 shall apply: 14 (1) COVERED AUTOMOBILE INSURER.—The 15 term ‘‘covered automobile insurer’’ means an insurer 16 that— 17 (A) has a statutory surplus attributable to 18 private passenger automobile insurance cov- 19 erage, as of December 31, 2017, in an amount 20 that exceeds $500,000,000; and 21 (B) annually collects more than 22 $500,000,000 in premiums for private pas- 23 senger automobile insurance coverage. 24 VerDate Sep 11 2014 19:04 May 21, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2684.IH H2684 pamtmann on DSKBFK8HB2PROD with BILLS 7 •HR 2684 IH (2) DIRECTOR.—The term ‘‘Director’’ means 1 the Director of the Federal Insurance Office of the 2 Department of the Treasury. 3 Æ VerDate Sep 11 2014 19:04 May 21, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H2684.IH H2684 pamtmann on DSKBFK8HB2PROD with BILLS