Explaining Variation in Insurance Anti-Discrimination Laws

44 Pages Posted: 27 Aug 2013 Last revised: 30 Sep 2015

See all articles by Ronen Avraham

Ronen Avraham

Tel Aviv University - Tel Aviv University, Buchmann Faculty of Law; University of Texas at Austin - School of Law

Kyle D. Logue

University of Michigan Law School

Daniel Schwarcz

University of Minnesota Law School

Date Written: August 27, 2013

Abstract

Discrimination in insurance underwriting is regulated at the state level. Surprisingly, there is a great deal of variation across jurisdictions in how and the extent to which risk classification by insurers is limited. Some states expressly permit insurers to consider certain characteristics, while other characteristics are forbidden or limited in various ways. What explains this variation across states? Drawing on a unique, hand-collected data-set consisting of the laws regulating insurer risk classification in all 51 U.S. jurisdictions, this Article argues that much of the variation in state-level regulation of risk classification can in fact be explained by focusing exclusively on three factors: the predictive capacity of the characteristic in question, the extent of the adverse selection problem created if the characteristic is restricted, and the extent to which the characteristic is considered a socially suspect classification.

Suggested Citation

Avraham, Ronen and Logue, Kyle D. and Schwarcz, Daniel B., Explaining Variation in Insurance Anti-Discrimination Laws (August 27, 2013). U of Texas Law, Law and Econ Research Paper No. 522; Minnesota Legal Studies Research Paper No. 13-54; U of Michigan Law & Econ Research Paper No. 13-018. Available at SSRN: https://ssrn.com/abstract=2316866 or http://dx.doi.org/10.2139/ssrn.2316866

Ronen Avraham

Tel Aviv University - Tel Aviv University, Buchmann Faculty of Law ( email )

Tel Aviv
Israel

University of Texas at Austin - School of Law ( email )

727 East Dean Keeton Street
Austin, TX 78705
United States
(512) 232-1357 (Phone)

HOME PAGE: http://www.utexas.edu/law/faculty/profile.php?id=ra22397

Kyle D. Logue (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734.936.2207 (Phone)

HOME PAGE: http://kylelogue.net

Daniel B. Schwarcz

University of Minnesota Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States

HOME PAGE: http://www.law.umn.edu/profiles/daniel-schwarcz

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