Sponsored by:
Assemblyman ROY FREIMAN
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
Assemblywoman YVONNE LOPEZ
District 19 (Middlesex)
Assemblywoman ANGELA V. MCKNIGHT
District 31 (Hudson)
Co-Sponsored by:
Assemblyman Verrelli
SYNOPSIS
Requires automobile insurers to provide policyholders with annual documentation demonstrating no discriminatory outcomes with insurer’s automated underwriting system.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning discrimination in automobile insurance underwriting and supplementing P.L.1997, c.151. (C.17:29A-46.1 et al.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. An automobile insurer using an automated or predictive underwriting system shall annually provide documentation and analysis to the Department of Banking and Insurance to demonstrate that there is no discriminatory outcome in the pricing on the basis of race, ethnicity, sexual orientation, or religion, that is determined by the use of the insurer’s automated or predictive underwriting system. Additionally, an insurer shall demonstrate to the commissioner that each pricing segment is balanced and not disproportionate to the overall policyholder population.
b. As used in this act, “automated or predictive underwriting system” means a computer-generated process that is used to evaluate the risk of a policyholder and determine an insurance rate. An automated or predictive underwriting system may include, but is not limited to, the use of robotic process automation, artificial intelligence, or other specialized technology in its underwriting process.
2. The Commissioner of Banking and Insurance shall adopt rules and regulations pursuant to the “Administrative procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), to effectuate the purposes of this act.
3. This act shall take effect on the first day of the sixth month next following enactment and shall apply to automobile insurance policies initiated or renewed on or after that date. The Commissioner of Banking and Insurance may take any anticipatory administrative action in advance as shall be necessary for the implementation of this act.
STATEMENT
This bill requires automobile insurance companies to annually provide the Department of Banking and Insurance with documentation and analysis demonstrating that there is no discriminatory outcome in the pricing determined by, or in any action associated with, the insurer’s automated underwriting system. Insurers are also required to demonstrate that each pricing segment is balanced and not disproportionate to the overall policyholder population.
Under this bill, “automated or predictive underwriting system” is defined to mean a computer-generated process that is used to evaluate the risk of a policyholder and to determine an insurance rate. An automated or predictive underwriting system may include, but is not limited to, the use of robotic process automation, artificial intelligence, or other specialized technology in its underwriting process.