Law Bans All Policy Rates Based on Gender : Montana Begins Unisex Insurance

Different insurance rates for men and women, assailed by some critics as sex discrimination, have been given the boot in the state that sent the first woman to Congress in 1916.

As of Tuesday, insurance companies in Montana may no longer take note of gender or marital status in determining insurance rates or coverage, under a state law passed in 1983.

Four other states have so-called unisex insurance laws applying only to auto insurance, but Montana’s is the first law covering all types of insurance. It withstood a last-ditch lobbying effort by the insurance industry this spring.

Under sex-based rates, women generally pay lower prices for life insurance because they live longer statistically. But backers of unisex insurance say female policies actually are worth less because of lower pay-out values.

Women also are charged higher rates than men for individual health insurance policies, because of factors such as childbearing and more frequent visits to doctors.

“Insurance is one of the few remaining areas where blatant sex discrimination is still sanctioned,” says Anne Brodsky of the Women’s Lobbyist Fund, a Montana group that lobbies for women’s issues.

Women’s and civil rights groups have been pushing unisex insurance laws for several years, but until Montana, they failed in 19 states and the District of Columbia.

Although the state represents only about 0.3% of the national insurance market, Brodsky says it makes perfect sense that Montana was the first comprehensive success for unisex proponents, citing its tradition of supporting women’s rights.

Just how the industry will comply remains a point of controversy.

The industry has predicted higher auto insurance rates for women under 25, a traditional low-risk group, and lower rates for young men, considered as a group to be risky drivers.

A 1983 study by Michigan, one of four states with unisex auto insurance, showed this happened there. But the study noted that, for those over 25--who represent 80% of the market--the new law had little impact on rates.

In life and individual health insurance, industry representatives have predicted that rates for men and women with similar ages and medical histories would be about the same.

Women’s groups have insisted that insurance companies should restructure their rates based on a variety of factors other than sex, such as a policyholder’s age, driving record, health habits, occupation or life style.