Sex Discrimination in the Insurance Market

Abstract

The problem. Public interest in the practices of the insurance industry that affect women has developed in recent years. Allegations have been made that many of these practices unfairly discriminate against women in the sale of the insurance product. Critics claim that it is often more difficult for women to obtain insurance because of different underwriting practices for men and women. They also claim that coverage and benefits for the same kinds of insurance are more limited for women than men. Finally, the claim is made that women, because of their sex, pay considerably higher premiums for health and disability insurance. Procedure. The purpose of this paper is to identify those practices that differentiate between men and women, and then to evaluate and analyze those practices in terms of their fair or unfair impact on women. The results of two sets of questionnaires provide the basic research data for the project. The first set of questionnaires was developed for, and distributed to insurance companies licensed in the state of Iowa. Separate questionnaires were prepared dealing with life, health, disability, automobile, and homeowner and property insurance. The second was a questionnaire for the consumer which was distributed to approximately 3,500 persons, most of whom were women. Because the questions were general in nature, the results were not readily quantifiable. Therefore, information from the consumer questionnaire was used to illustrate the potential problems identified with the findings of the company questionnaires. Findings. The project findings are many and vary by kind of insurance, and they are presented separately in the report by type of insurance surveyed. The following is a brief summary of the major findings. 1. Rate classification by sex was found in all but homeowner and property insurance. 2. Maximum coverage and benefits were not as universally available to women as to men. 3. Comprehensive pregnancy-related coverage is not generally available. 4. Disability insurance for homemakers is not generally available. 5. Marital status is often a factor in determining insurability. Conclusion. While the adverse effect on women of these findings is readily seen, the elimination of the disparities raises further questions and controversy. Legislation to remove some of the inequities is a logical beginning but further study and interpretation of the discriminatory impact of sex-related classifications is also indicated.