US Federal House Bill HB3664

US Federal 2025-2026 Regular Session

• Introduced: 5/29/25
• Refer: 5/29/25

Caption

PAID Act Prohibit Auto Insurance Discrimination Act

Impact

If enacted, the bill would significantly impact how auto insurance companies underwrite policies and calculate premiums. It would prevent insurers from considering specific demographic factors that do not pertain to a driver's actual risk, thereby creating a fairer system for insurance pricing. Furthermore, it mandates the Federal Trade Commission (FTC) to enforce these changes and report on the practices of insurers, aiming to reduce discrimination based on socioeconomic status. This measure is expected to improve accessibility to affordable auto insurance for consumers from diverse backgrounds.

Summary

House Bill 3664, known as the Prohibit Auto Insurance Discrimination Act (PAID Act), aims to prohibit private passenger automobile insurers from using certain proxies to determine insurance rates and eligibility. The bill addresses practices within the auto insurance industry that utilize factors such as income proxies, including a driver's education level, occupation, employment status, credit score, and ZIP code, to influence premium rates. This trend has resulted in disproportionately higher rates for lower-income drivers, which the bill seeks to rectify by implementing stricter regulations on how insurers assess risk and set rates.

Contention

Notable points of contention surrounding HB 3664 include concerns from traditional auto insurers who may argue that the inability to use certain income-based factors could lead to increased risk for the companies and potentially higher overall rates for consumers. Opponents of the bill may also highlight the importance of maintaining competitive pricing models that consider a range of factors, arguing that the legislation could disrupt the current balance in risk assessment mechanisms within the auto insurance market. The discussions will likely trend towards finding a compromise that addresses equality in insurance practices while acknowledging the role of data in underwriting.