Asbury Park Press

Bid To Alter GEICO's Practices Fails In Senate

Asbury Park Press — Monday, March 5, 2007

BY TOM BALDWIN
GANNETT STATE BUREAU

TRENTON — Insurance companies will be allowed to continue using education and jobs as factors in setting rates in New Jersey, as a movement that equated those factors as proxies for race and sought to end them sputtered in a Senate committee today.

"We'll live to fight another day," said Sen. Nia Gill, D-Essex, sponsor of the
measure that failed to gather support in the Senate Commerce Committee, of which Gill is chairwoman.

Gill's was the lone yes vote. Her Democratic colleagues abstained, as did one
Republican, while the second Republican on the committee voted no.

"I am very proud to vote yes," said Gill.

Education and occuption are among the factors considered by some companies, most prominently GEICO, the state's third-largest insurer, and a report issued last week by Citizen Action asserted that the result is higher rates for minorities.

"This is totally false," said GEICO Legislative Counsel Hank Nayden, arguing that the insurer uses education levels and jobs to set rates, but does allow either to be
decisive among 18 other factors.

Nayden said 40 percent of GEICO's best-rate customers have what he called lower levels of education and less-than-high-paying jobs.

Over the decades, auto-insurance companies had fled from New Jersey, seeing it as overregulated to the point they could not make money here. But reforms giving insurers more freedom to operate have brought back many companies and intensified competition.

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