Attorney General Opinion WW-0339

- - vrHE ,~Tl?OHNI!:Y GENEHAL OF TEXAS Hon. Penn Jackson State Board of Insurance Internat ional Life Building Auntin, Texas opinion No. ww-339 Be: Whether a different rate of grors premiums charged male end female riekr of the 6ame Dear Sir: age on the same type of policy violate8 Article 21.21, Texan Inntirance Code. You have requerted our opinion be to the proper ,conetruction to be given Section 4(‘7) of Article 21.21 of the Texas Ineurance Code. We quote from your letter 84 followo: “Article 21;21, Bedtion k(7), Texan Insurance Code, prohibitr unfaiti dli~rimination in i&ruing insurance poll- ciee within thii State+ We perpectfully requeet your opin- ion aa to whether s rate differential and 8 groes premium charged male and female risks Se de6cribed above, is con- trary to the proririona of Article 21.21P” Article 21i21 of the Tespia Insurance Code 80 amended, Acts, 1957, page 401, chapter 198, prohibits “Unfair Methode of Competition and Unfair or Deceptive Acts or Practices 1( in the busineea of insur- ante . One of the prohiblted a&n ilr “Unfair Dlrcriminatioe” which 16 defined in Section k(7) a6 followe: “Making or permitting any unfair dircrimination be- tween individual6 of the oamc cl800 and eqM1 expectation of life in the rater.charged for any contract of life in- aurance or of life annuity or in the dividends or other benefit8 payable thereon, or in any other 61 the terme end condition6 of ruch contract ;” The State Board of Inrurance in given power to determine, after hearing, whether ruch prohibited acte have occurred and to ie- cue cease and dseist order8 in connection therewith (Sections 5, 6 and 7 of Article 21.21). This article placer the burden of fact findlng upon the Board 8nd it ie for the Board to determine tihether 8 violation hen occurred. In determining whether unfair dincriminatlon has occurred, the Board must determine whether the indlvidual~ in queetion are of the - - Eon. Penn Jackeon, page 2 (WV-339) fame clase and whether the individuals are of equal expectation of life. If these questions are determined in the affirmative, the Board muet then decide whether the ditrcrimlnation in ratee la unfair. The key is "unfair discrimination", and thie la a factual teat within the scope of determination by the Board. SUMMARY Under Article 21.21, Section b(7) of the Insurance Code of Texas, it 18 within the determination of the State Board of Insur- ance whether or not a particular fact situ- ation involves unfair discrimination in the gross premiums ,charged male and female risk6 of the flame age on the same type of policy. Very truly yours, WILL WILSON f&;&;o~~ Richard A. Wells Adsistant RAw:lm APPROVED: OPINION COMMITTEE Geo. P. Blackburn, Chairman 2. C. Davl6 John Reeves John Webster Milton Richardson REVl3WEDFCRTREA'i?IORN.SYOENERAL BY: W. V. Geppert .