State regulators want to know if some of Florida's biggest auto insurers are singling out drivers based on race.
The question is whether using education level and occupation to set rates forces minority policy holders to pay higher premiums regardless of their driving records.
Geico is the third-largest auto insurer in Florida. Two of the factors it uses to set rates are a motorist’s education level and occupation.
With less than half as many blacks as whites with Bachelor’s degrees in Florida, State Insurance Commissioner Kevin McCarty is concerned the practice is just a veiled way to charge minorities more while giving whites a break. "It may be correlated to losses, but it doesn’t sound fair."
Geico and execs of two other companies were grilled about the practice during a public hearing. State regulators demanded to know why a mechanic with no high school diploma might be charged 300 percent more than an engineer with the same driving record.
Steve Parton with the Florida Office of Insurance Regulation said, "You don’t care how it impacts people based on income or color?"
Geico Vice President Hank Nayden didn’t flinch. He says Geico covers nearly a million motorists of all education and income levels in Florida. "If we were not providing an accurate and fair rate, they would certainly be flocking to our competition," he said.
Geico insists it doesn’t care about the color of the skin of its customers.
Its big concern is the color of your money.
"We have no interest in knowing what race they are, what ethnicity, what religion they might be. We simply want to write them auto insurance," Nayden said.
Still, regulators remain concerned what’s good for business isn’t necessarily good for Floridians struggling to make ends meet.
Representatives of Liberty Mutual Insurance and AIG were subpoenaed to appear at Friday’s hearing.
The Office of Insurance Regulation is expected to recommend changes in a report on the hearing to the governor and legislative leaders.