Assemblyman Jeffrey Dinowitz announced sponsorship of legislation that would require automobile insurance companies to disclose how they determine customer premiums.
The proposal would require insurers to submit annual financial statements to the New York State Department of Financial Services detailing income, expenses and the factors used to calculate premiums. The bill is sponsored in the Senate by State Sen. Jamaal Bailey as S.1655 and in the Assembly as A.10616-A.
Dinowitz said he introduced the measure as car insurance costs continue to rise. On average, New Yorkers pay more than $4,000 a year in premiums, nearly $1,500 above the national average.
The legislation would expand current reporting laws by requiring insurers to provide detailed data on revenue sources such as premiums received, investment income and profits from asset sales.
Companies would also need to disclose expenses, including salaries, commissions, consulting fees, legal expenses and advertising costs. Insurers would have to itemize the salaries of the 20 highest-paid employees.
The bill would require a summary of total claims and settlements paid and data on claims settled with or without payment. Civil penalties could be imposed on companies that fail to comply.
The information would be made publicly available on the Department of Financial Services website.
Dinowitz said insurers sometimes use factors unrelated to driving behavior when determining premiums, including gender, credit history, location and whether a driver owns or rents a home.
“For many New Yorkers, owning and driving a car is not a luxury. Many people need to drive to work, medical appointments, the store for groceries, and much more,” Dinowitz said. “When a person contacts an auto insurance company to ask how much it would cost to insure their vehicle, they are only told the amount and not what goes into that amount.”
“No one should be surprised or dispute that an auto insurance company should take a person’s driving record into consideration when determining the premium. However, if an auto insurance company is going to consider other information, such as credit score, gender, or whether a person owns a home or rents, then that person should have the right to know information about that company and its business practices when determining whether they want to give that company their business.”
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