California insurance regulators proposes reforms on group discounts in auto insurance

On Monday, the California Department of Insurance proposed reform measures which includes ways for insurers to include more people from low-income families.

Currently insurers offer group discounts based on education, occupation, and other factors, to the detriment of low-income families.

The development comes in the wake of an investigation carried by the California Department of Insurance, wherein the regulator discovered that beneficiaries of group discounts were residents of California in areas with higher average incomes, higher levels of education, and predominantly non-Hispanic white population.

“The Department’s historic investigation found that many insurance companies were effectively using group discounts to ‘cherry-pick’ members, giving some higher-income occupations a ‘fast pass’ while people of color and lower income motorists were left in the slow lane,” said insurance commissioner Ricardo Lara, in a statement.

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