Columbus, OH (August 16, 2021) – A report commissioned by the consumer representatives to the National Association of Insurance Commissioners (NAIC) finds that disparities and bias are common challenges that consumers face across insurance products. The report summarizes findings from a survey of consumer-serving non-profit organizations across the U.S. about challenges faced by consumers in the insurance sector.
Eight in ten (79%) respondents reported that their consumers face “some” or “a lot” of discrimination or bias related to barriers in insurance coverage. The two most common instances of discrimination or bias identified were based on income (65%) and race/ethnicity (58%), although the results varied by insurance line (e.g. health, property, life). Insurance ratings based on biased algorithms also emerged as a theme from the survey.
Other challenges identified by survey respondents and discussed in the report include affordability of insurance coverage, consumer difficulties understanding their coverage and costs, insufficient coverage offered by insurance products, and insurance application/enrollment difficulties.
Over the past year the NAIC has responded to the movement for racial justice, in part, by establishing a Special (EX) Committee on Race and Insurance to examine issues related to race, diversity and inclusion in, and access to, the insurance sector and insurance products.
To best contribute to this work, the NAIC Consumer Representatives commissioned the survey with the aim of broadening the voices and perspectives available to state regulators on coverage disparities and challenges. The survey assessed common themes and patterns across demographic groups, with the recognition that disparities and inequities are often rooted in intersectional and overlapping systems of oppression.
“This survey amplifies the important consumer voices that smaller organizations hear from and represent every day so they can be heard and considered by state regulators,” said Yosha Dotson, Consumer Representative from Georgians for a Healthy Future.
In addition to the survey findings, the report also puts forward recommendations to the NAIC and state regulators to address bias and discrimination in the industry. Recommendations include: new or renewed engagement by state regulators of broad, diverse networks of consumer organizations, the creation of standards for community engagement by the NAIC, and the collection of data that can better assess disparities.
“The survey recommendations will assist the NAIC’s critical work to meaningfully address the long-standing, historical barriers that contribute to disparities in insurance access,” Dotson added.
The Consumer Representatives presented their full findings to the NAIC’s Consumer Liaison Committee on August 14, 2021. The full report can be accessed here.