State finds isle auto
insurers using illegal
criteria to set rates

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By Diana Leone
dleone@starbulletin.com

Three weeks ago, Hawaii Insurance Commissioner Wayne Metcalf read an Associated Press news article that said some insurance companies were illegally using policy holders' credit ratings to determine car insurance premium rates on the mainland.

Metcalf immediately sent a survey to insurance companies doing business in Hawaii to ask if such a thing was going on here.

Last week, his auditors made surprise visits to major insurance companies to check the honesty of the insurance companies' answers.

Metcalf didn't like what they found, he said yesterday. "In the process of field audits we found that some companies were engaging in other prohibited activities."

DTRIC used marital status and AIG Hawaii used age as factors in determining premiums, Metcalf said. Both companies have since agreed to stop using those criteria.

"Hawaii has a clear and strict law prohibiting auto insurers from using discriminatory criteria when determining a person's auto policy premium," Metcalf said. Race, creed, ethnic extraction, age, sex, length of driving experience, credit bureau rating, marital status and physical handicap are all illegal.

"In this particular instance it's troubling because this is a law that's been on the books 28 years," Metcalf said. His division will begin "cease and desist" proceedings next week.