Nearly every major insurance figure in Washington has expressed their intolerance of insurance redlining, vowing to stamp it out. Whether they can push legislation through Congress before it adjourns Oct. 7 is another matter.
Sen. Donald Riegle, D-Mich., chairman of the Senate Banking Committee, had the House's two biggest redlining players appear as special witnesses at a May 11 hearing on homeowners' insurance discrimination.
Rep. Cardiss Collins, D-Ill., hinted at the backstage maneuvering on legislation she and Rep. Joseph Kennedy, D-Mass., have been pushing.
"Insurance redlining is not fiction; it's a fact," said Kennedy, who chairs the Subcommittee on Consumer Credit and Insurance. "If you're African-American, or Latino, or Asian or gay, then Nationwide is not on your side, you're in slippery hands with Allstate, and unlike a good neighbor, State Farm is not there."
"Some of us may differ about how best to address the issue of insurance redlining. But I believe most of us agree that there is a problem," he said. "We must work together to solve it. The Home Mortgage Disclosure Act and other laws haw helped to eliminate discrimination in the banking industry. Now it is time to expand the fight for fairness to the insurance industry,"
Roberta Achtenberg, assistant secretary at the Department of Housing and Urban Development, said, "It is a top priority for HUD to assure the American people the full protection of the Fair Housing Act. To do so, we are charged with providing the same protection from discrimination in the provision of property insurance that we provide in all other residential real estate-related transactions including real estate practices and mortgage lending."
About the only noninsurance basher to testify was Lynn Schubert, assistant general counsel for the American Insurance Association, who spoke on behalf of AIA, the Independent Insurance Agents of America and the Council of Insurance Agents and Brokers.
"These organizations have one over-riding goal on the issue of insurance access and availability, Chairman Riegle: Urban residents and businesses, as all other Americans, must be able to purchase attractive insurance products at a price reasonably based on the risk," she said. "AIA, IIAA and the council members are committed to working with legislators, regulators, consumers and brokers to ensure that this occurs."
She acknowledged that more residents and small businesses in the cities are without insurance than in other areas. "These discrepancies are related to a whole host of socioeconomic circumstances faced by people who work and five in urban areas, and which also increase the cost of insurance," she said.