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Women’s Advocates, Companies Differ on Impact of Gender Ruling

July 28, 1992

BALTIMORE (AP) _ Women’s rights advocates hailed a Maryland ruling barring insurers from basing life insurance rates on gender. But an industry official said the move could put policies out of the price range of single mothers.

The Maryland Insurance Commission ruled Monday that gender-based life insurance premiums violate the state’s Equal Rights Amendment. Maryland now joins Montana as the only state prohibiting the practice.

″We think the ruling is important in starting to chip away at the treatment of women as a class instead of an individual. It’s an important step forward,″ said Martha Davis, a lawyer for the National Organization for Women’s Legal Defense and Education Fund in New York. NOW’s Maryland and Baltimore chapters were plaintiffs in the case.

The decision could spur as many as 16 states that have equal rights provisions in their constitutions to ban differing insurance rates for men and women, Davis said.

Federal law already forbids gender-based adjustments in policies offered by employers, but private insurance is regulated by individual states.

″We’re thrilled with the decision,″ said Kathleen Schemer, executive director of the Women’s Law Center in Baltimore. ″Insurance is one of the last few areas of deep-rooted sexual discrimination.″

The decision is the latest development in a case that began in 1978 when the Maryland Commission on Human Relations sued the Equitable Life Assurance Society, the nation’s third-largest life insurer.

Officials of the New York-based company have said they will appeal the decision, which would force insurers to stop charging lower life insurance rates for women, who on average live longer than men.

The higher rates will have severe consequences for single mothers who can’t afford increased insurance costs, said Debbie Chase, a spokeswoman for the American Council of Life Insurance.

″Think what might happen to the family if a single mother were to forego the insurance policy and the mother were to die,″ Chase said.

Although the ruling will mean higher premiums for women buying life insurance, that will likely be balanced by savings in health insurance rates, which generally are higher for women, Ms. Davis said.

About 70 percent of health insurance policyholders purchase through group plans, and are not affected by premiums charged according to gender, said Teresa Sorota, assistant general counsel for the Health Insurance Association of America.

The Maryland decision only applied to life insurance, and state Insurance Commissioner John A. Donaho couldn’t say whether it would eventually be used to set rates for other types of insurance.

″It is of course a precedent. But it will have to go through our courts and possibly the federal courts,″ he said.

The ruling gives Maryland insurance companies until the end of the year to remove gender-based language from life insurance policies.

In Montana, NOW estimates that women will save up to $20,000 over their lifetimes because of the state’s 1985 law requiring unisex insurance pricing practices.

Bill Hanson, the executive assistant to Montana’s insurance commissioner, couldn’t confirm those figures, but said neither women nor insurance companies seem to have suffered from the law.

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