Rates insurance Geico very unfair
The Consumer Federation of America (CFA) charged that the No. 4 U.S. auto insurers, rating methods and underwriting guidelines in 44 countries, rates of tie directly to education and occupation.
Geico, a unit of Berkshire Hathaway Inc. (CRM), insurance and investment company billionaire Warren Buffett, taxes rejected. He called “an offensive attempt to link fundamentally fair and payment practices of its industry invidious discrimination.”
The insurer offers auto insurance for more than 6 million policyholders and insures more than 10 million vehicles.
Robert Hunter, CFA, director of insurance in Texas and a former commissioner sought assurances Geico’s rate setting a policy of “pockets of subscription main tower,” shortchange thousands of drivers.
In accordance with the guidelines Geico, he said, New Orleans factory workers, without paying high fees, $ 2636 for insurance, 91 per cent over $ 1382, knows that a worker with a cycle ’studies, to pay for the same vehicle and the site.
“It is clearly an impact on minorities and low-income people,” said Hunter in an interview. “If this is not violative of the law, it must also be. It seems very unfair. ”
In a March 14 letter from the National Association of Insurance Commissioners, CFA, said Geico the use of education to determine rates statute allows to circumvent prohibitions on the use of income as a guideline for pricing, because it is racially discriminatory.
“What is very worrisome is that Geico appears that these guidelines, de facto, the method of notation,” he said. “Geico method is wrong, because not everyone has the chance, or it can afford to take a year to four College final.
The CFA has asked the NAIC to intervene before practice, he said another car insurers are to be used at the beginning, it is more widespread.
Geico, replied in a letter on March 17 on the NAIC, said the CFA are not properly position, a public policy and legal and are a “Full Frontal attack” on competition and consumers’ freedom of choice .
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