TRENTON, N.J., March 8 – Assemblyman Neil Cohen (D-Union County) issued a scathing statement on why he wants a law to prevent a persons educate and profession from being used as risk factors in insurance underwriting in the state.

Cohen said, Unless someone can show me mountains of evidence to the contrary, I continue to maintain that this specific practice is discriminatory.

Cohen, Chairman of the Assembly Insurance Committee introduced legislation to ban the practice, and it is in direct response to a newspaper article reporting that GEICO was using education and profession as one of the rating factors to determine car insurance premiums for customers.

The bill (A.2819) is now before his committee and is expected to be released promptly for a full Assembly floor vote.

Cohen Outlines Objections

Cohen said he is outraged that these conditions are used even though they have nothing to do with a persons driving performance.

He said, You cant expect me to believe that there is a significant difference in the driving abilities of someone who went to Boise State versus someone who went to Princeton. If this criteria was used in any other statute it would be immediately struck down as Unconstitutional.

Cohen asked, Does this type of price setting mean that a person who can no longer afford college suddenly becomes a greater insurance risk? Does that mean that someone who quits college to support their family should be penalized?

Pandoras Box

Cohen shrugged off criticisms that it would be a setback to the industry by interfering with its ratemaking options. Industry officials defended the use of education and occupation, noting that architects, lawyers, doctors, teachers, professors and other professionals with college degrees are better risks than low skilled workers or those with a minimum high school level education.

Cohen said, I have no intention of reopening the Pandoras box of problems that caused so many insurers to leave the state in the 80s and 90s, because of over regulation.

But he said of the use of occupation and education as rating factors, When there is an obvious unfairness, we must address it immediately.

Explanation

GEICO had explained in an earlier statement it routinely evaluates more than two dozen potential risk factors and has been using occupation and education for that purpose successfully for years across the country.

Magdalena Padilla, president of the Insurance Council of New Jersey representing about 90 percent of the car insurance market in the state said that Cohens bill, if it became law, would be a major setback.

Cohens criticism of GEICO was the first such blast against the industry since the Legislature approved new insurance laws three years ago that eased regulations to improve the once tight car insurance market.