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States Need Insurance Policyholder Advocacy Agencies: Advocate

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A longtime insurance consumer advocate has a proposal for fighting racism in insurance: Give every state a permanent, securely funded agency that can represent consumers in all kinds of disputes involving insurance.

Birny Birnbaum, director of the Center for Economic Justice, included the “Bureau for the Consumer Advocate” (BICA) provision in a proposal for developing “a new model law to address systemic racism in insurance.”


  • Links to NAIC Consumer Liaison Committee resources, including meeting packets, are available here.
  • An article about the NAIC’s new artificial intelligence guidelines is available here.

Birnbaum presented the proposal earlier this month, during an online meeting session organized by the Consumer Liaison Committee at the National Association of Insurance Commissioners (NAIC).

The NAIC is a Kansas City, Missouri-based group for insurance regulators. The Consumer Liaison Committee’s session was part of a “virtual summer meeting” that the NAIC held in place of a scheduled in-person summer meeting, due to COVID-19-related travel restrictions and social distancing rules.

Birnbaum is one of the people with an official designation to speak for consumer interests in NAIC proceedings. He has asserted for years that new artificial intelligence, machine learning and “big data” analysis techniques could hide intentional or unintentional forms of illegal discrimination. The NAIC has included a provision banning discriminatory use of artificial intelligence strategies in insurance in a new set of artificial intelligence principles that the group adopted during an NAIC-wide meeting session.

Birnbaum suggested in the new proposal that the NAIC should adopt a model that would:

  • Define fair and unfair discrimination in insurance.
  • Define and ban use of “proxy discrimination against protected classes,” or use of indicators other than race, gender and the like that indirectly lead to what Birnbaum sees as being unfair discrimination against members of groups of people who are supposed to be protected against discrimination by state and federal antidiscrimination laws.
  • Require regulators to watch for unfair discrimination involving use of data, algorithms, artificial intelligence, advisory organizations, or the “statistical agents” that collect data for insurance organizations.
  • Give consumers more and easier-to-use information about insurance, to help them become better insurance shoppers.

Birnbaum also proposed funding a BICA agency in each state with an assessment of 10 cents to 25 cents per individual insurance policy issued in a state. He also called for imposing the assessment on each certificate for a member of a group policy or master policy issued in a state.

The BICA should have the same kind of access to non-public insurance company information that a state’s insurance department could see, and it should have the standing to speak for consumers in a state’s insurance regulatory proceedings, according to Birnbaum.

— Read State Insurance Regulators Hold Session on Race and Insurance on ThinkAdvisor.

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