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Montana law allowing marriage, sex to factor into insurance rates challenged

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Posted at 10:54 AM, Nov 04, 2022
and last updated 2022-11-04 12:54:10-04

HELENA — A lawsuit filed Wednesday challenged the constitutionality of a 2021 law, which allowed insurance companies in Montana to factor sex and marital status into risk calculations.

Financial institutions in Montana still can’t discriminate based just on sex or marital status. However, under the 2021 law, lawmakers carved out an exception allowing companies to use a person’s sex and marital status as a data point in assessing risk and setting insurance premiums.

In a press release Thursday, attorneys for the plaintiffs said the law violated the state constitution, which bans discrimination based on sex as well as “broadly protects against treating people differently based on irrational classifications.”

Representing the plaintiffs are attorneys with Upper Seven Law as well as former Democratic legislator Kimberly Dudik. They filed the suit in Lewis and Clark District Court. Montana State Rep. Sue Vinton, R-Billings, carried House Bill 379, which created the exception.

“Legislators claimed that HB 379 would be good for women in particular, but failed to examine the data closely,” according to the press release from Upper Seven Law.

The case is another of about a dozen lawsuits filed against bills passed during the 2021 legislative session. Upper Seven Law was part of the legal team that got a permanent injunction on several 2021 election laws.

Montana State Auditor and Commissioner of Securities and Insurance Troy Downing is named as a defendant in the lawsuit. Downing’s spokesperson, Sam Loveridge, said in a statement Thursday all rates submitted to the auditor’s office are “reviewed to ensure they are not excessive, inadequate, or unfairly discriminatory.”

“Our office requires companies clearly demonstrate that the gender distinct premium rates are actuarially justified,” Loveridge said.

Plaintiffs attorney Rylee Sommers-Flanagan said the issue isn’t just the law allowing insurance companies to use data about sex and marital status to set premiums. The law makes using these factors a nondiscriminatory practice, which Sommers-Flanagan said means people cannot use the Montana Human Rights Bureau to seek help with discriminatory insurance determinations.

The Montana human rights process can save people time and money when seeking relief from discrimination, Sommers-Flanagan said. Without it, anyone challenging an insurance rate as discriminatory will have to challenge it in court on a constitutional basis, she said.

Kyle Schmauch, a spokesperson for legislative majority leadership, said the bill brought Montana in line with 49 other states with similar laws. Insurance companies already use sex as a factor when assessing risk in, for example, car insurance, Schmauch said. Under some plans, women are considered less risky drivers, and therefore have lower premiums, he said.

However, Montana’s unisex requirement for insurance did not result in insurance companies setting a unisex risk assessment, Schmauch said. Instead, companies used the rate for men, costing women more money, he said.

Plaintiffs disagreed with this and in their press release called insurance rates based on sex alone “arbitrarily discriminatory” which can lead to “inconsistent and contradictory rate determinations.”

“As a result, both men and women face unpredictable discrimination in different insurance markets,” the release said.