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South Dakota Seeks Input on Use of Price Optimization

July 2, 2015 AAIS Advisory notice

The Property Casualty Insurers Association of America (PCI) reports that the South Dakota insurance department sent a survey regarding price optimization to 30-40 insurers on June 10, 2105. 

According to the PCI, recipients are asked whether and how they use price optimization in their rating plans; recipients are directed directing to respond to the survey within 20 days. The department is not making the survey public, however.

Several states have prohibited or restricted the use of price optimization, while others are researching the issue while cautioning insurers that the use of rating factors not related to risk of loss may violate laws against unfair discrimination in insurance rating.

AAIS Advisory notices are posted periodically to announce AAIS product developments, and to provide news items that are relevant to our program users. Advisory notices are news summaries that paraphrase documents which should be consulted directly for complete, authoritative information.

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