Insurance Department Questions Rate-Setting Practices

The State Insurance Department questions the way home and auto insurance companies clump people together for rate-setting purposes. Department spokesman Randy McConnell says a Department study shows some insurance rating territories have been set up to have 90 percent minority population. The Department is not ready to say the lines are being drawn arbitrarily. McConnell says the rates charged in those segregated areas are as much as 250-percent more than they are in other areas. He says the Department finds the areas, as drawn, might be actuarily justified, but might not be an acceptable division of society.