Colorado Bill Prohibits Insurer Use of ‘Discriminatory’ Data
Colorado lawmakers are considering legislation to prohibit insurers from using third-party site data to charge higher insurance premiums based on race, national or ethnic origin, religion, gender, sexual orientation, or disability. The bill would specifically prevent insurance companies from using consumer information gathered from external sources such as social media, court records, or homeownership records to determine insurance rates. Such data also would include a consumer’s credit score, purchasing habits, and level of education.
In addition, the bill applies to discriminatory data in algorithms and predictive modeling, which are used by insurers to assess risk-based characteristics that affect a customer’s proposed rate.
Colorado Insurance Commissioner Michael Conway says the state’s insurance department currently does not have sufficient resources to audit insurance companies' algorithms. Conway believes the bill would ensure more accountability by making insurers conduct “stress tests” on their data systems and report to the agency.