Sexy Premiums

Feminists vs. insurance firms

First came unisex hair styles, then unisex clothing. If the National Organization for Women has its way, unisex insurance will be next. Feminist groups and several powerful Congressmen are pushing two separate bills in Congress to end the traditional practice of establishing insurance rates on the basis of gender, which often results in higher premiums or lower benefits for women. Says Kathy Bonk of the Legal Defense Fund: "We have to take the profit motive out of sexual discrimination."

Insurance companies say they set prices on the basis of measurable differences between different groups of people. Women, for example, live about seven years longer than men, while people under 30 have twice as many accidents as older drivers. Result: women pay more for an annuity, and young drivers spend more on auto insurance. Industry officials warn that if insurers must set the same prices for all, the result will be a rate free-for-all that could make certain high-risk groups, like male teen-age drivers, uninsurable. Moreover, they contend that converting to unisex could cost the industry billions in added liabilities and administrative expenses. "The near-term jolt will shake the insurance and pension systems to their foundations," says Daniel McGinn, an official with the International Foundation of Employee Benefit Plans. "And the long-term impact could be disastrous."

Alarmed by the recent passage of a state unisex insurance law in Montana and moves to enact similar legislation in twelve other states, as well as at the federal level, the industry has begun an effort to influence legislators. Last week, in a full-page advertisement in major newspapers, the Health Insurance Association of America and the American Council of

Life Insurance urged readers to ask their Senators and Congressmen to vote against unisex insurance bills. Said one congressional-committee staffer: "It seems like they're really pulling out the stops."

NOW rests its case on figures showing, for example, that a 40-year-old woman pays $262 a year more than a 40-year-old man for equivalent medical coverage, or that a 65-year-old female retiree gets 10% less a month for the same 30-year annuity. Unisex insurance supporters have different complaints about different types of coverage. The three major programs:

MEDICAL. A male aged 25 to 30 might pay $810 for a health-and-accident policy, vs. $ 1,134 for a female of the same age. Insurance companies explain that this disparity is due to the fact that women generally have more routine hospitalization. Feminist groups dispute these figures and then point out that women tend to smoke and drink less, get in fewer auto accidents and live longer.

LIFE. Women pay less than men for life insurance because of greater longevity, but until recently most companies gave them credit for living only three years longer, about half the real difference of life expectancy at birth. With annuities, on the other hand, women get reduced monthly payments. The total amount women collect is actually higher on average because they earn interest for a longer period of time. "The unfairness and injustice of this are profound," says NOW President Judy Goldsmith. "The woman doesn't pay any less for food at age 65, or for rent or for anything else."

AUTO. Young women pay lower premiums for auto insurance than young men because they have fewer accidents. But supporters argue that the rate advantage fades after age 25, even though women of all age groups have driving records that are 23% better than men, primarily because they drive less.

To dramatize their cause, NOW members last week picketed the offices of major insurance companies across the country. Meanwhile, insurance-industry efforts to sabotage the bill have so far only hardened the resolve of its supporters.

Senator Robert Packwood, Commerce Committee chairman and the bill's chief Senate sponsor, angered by the industry's aggressive lobbying efforts, recently warned its officials: "You're asking to die by this sword if you want to live by this sword. Congress will rise up in wrath against you." The bill is now given a better than even chance of passage. This file is automatically generated by a robot program, so viewer discretion is required.