Eric S. Poe, Esq., CPA, Chief Operating Officer of CURE Auto Insurance, a not-for-profit full service provider of auto insurance in New Jersey and Pennsylvania, pens a letter to leaders at the National Association of Insurance Commission (NAIC) requesting the organization reverse its recent position and join his crusade for a nationwide ban on the use of “income proxies” in determining car insurance rates. This past March, the NAIC and Mr. Poe sat in opposition of one another as they testified before the Congressional Financial Services Subcommittee in Washington DC regarding the use of education, occupation and credit scores, in car insurance rate-setting. This is not the first time Poe has pleaded his case before Congress. He has been advocating against such unfair practices for more than 15 years and applauds the legislative and regulatory actions in both New York (2018) and Michigan (2019). Poe also has relentlessly pledged his public support for the federal PAID Act and similar legislation in New Jersey (A-4179, S-111), both of which would ban the use of “income proxies” by auto insurers.

The issue of discriminatory practices is not new in the insurance industry. The NAIC formed a voluntary working group in the year 2000 to investigate “race-based” life insurance discrimination and shockingly discovered that a number of companies were still selling racially discriminatory policies. The organization learned that these life insurers simply substituted “educational attainment” and “occupation” for “race” upon the passage of the Civil Rights Act, in order to subvert the law. Despite the NAIC working group’s findings, such prior testimony, and multi-million-dollar settlements in the life insurance context, educational attainment, occupational status and other “income proxies” are still being used today to set car insurance rates.

“Personally, I am embarrassed as an executive in the auto insurance industry that we continue to turn a blind eye to this pervasive discriminatory practice, which is clearly rooted in racism. While life insurance is optional, it is important to note that car insurance is required in 48 out of 50 states,” says Poe, who sees the devastating results of these policies first-hand, every day. In the years following New Jersey’s 2004 decision to allow auto carriers to use these factors in rate-setting, the number of New Jersey drivers who can no longer afford car insurance skyrocketed by 86% as the uninsured motorist rate rose from 8% to 15% between 2007 and 2015. “We have all seen the television and internet ads, yet, somehow the largest and most recognizable insurance company brands continue to use such income proxies to “fly under the radar” of scrutiny. They charge the highest rates to consumers who can least afford it, despite the applicant’s safe driving record.”

In his letter to the NAIC, Poe requested to be part of the group’s recently announced Special Session on Race and Diversity at its Virtual Summer National Meeting. His industry expertise, testimonial history and knowledge of the ongoing discriminatory practices in insurance products would offer a unique perspective and broaden this important discussion. Poe adds, “As stewards and leaders of the insurance industry, the NAIC must remain vigilant and uncompromising in ensuring that factors so closely correlated to race and income are not used to perpetuate inequality in our society. The time is now to finally put an end to these practices.”

Headquartered in Princeton, N.J., Citizens United Reciprocal Exchange, (CURE) is a not-for-profit reciprocal exchange. Founded in 1990 by New Jersey Insurance Commissioner James J. Sheeran and award-winning insurance expert, Dr. Lena Chang as an answer to the insurance crisis in New Jersey, CURE continues to lead the way as the not-for-profit solution for responsible drivers and the "cure" for continuously evolving auto insurance problems. CURE is currently available in New Jersey and Pennsylvania. More information can be found at cure.com or by calling 800-535-CURE.