NAMIC Issue | Disparate Impact Theory

Disparate Impact Theory [F/S]

Our Position

The Department of Housing and Urban Development is seeking to impose a burdensome rule that could force insurers in the competitive homeowners marketplace to defend virtually any underwriting metric from litigation if it is found to have a negative effect on a protected class. The rule does not consider that discrimination was not intended and that insurers do not collect demographic information that would enable them to know if a disparate impact has occurred. NAMIC has challenged the rule, but if it is allowed to stand insurers will have to adjust rates to meet this added risk of litigation.