The opinion
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vrHE ,~Tl?OHNI!:Y GENEHAL
OF TEXAS
Hon. Penn Jackson opinion No. ww-339
State Board of Insurance
Internat ional Life Building Be: Whether a different rate of
Auntin, Texas grors premiums charged male
end female riekr of the 6ame
age on the same type of policy
violate8 Article 21.21, Texan
Dear Sir: 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
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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:
OPINIONCOMMITTEE
Geo. P. Blackburn, Chairman
2. C. Davl6
John Reeves
John Webster
Milton Richardson
REVl3WEDFCRTREA'i?IORN.SYOENERAL
BY:
W. V. Geppert
.