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OCE-84-8 1 (1984-09-27)

handle is hein.gao/gaobabnnj0001 and id is 1 raw text is: Igod COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON D.C. SEPTEMBER 27,1984 125452 B-213348 The Honorable Lowell Weicker. ,... . United States Senate The Honorable Nancy L. Johnson RELEASED House of Representatives Subject: Comparison of Estimates of Effects of Fair Insurance Practices Act on Women's Insurance Costs (GAO/OCE-84-8) In separate letters dated July 28, 1983, and August 2, 1983, respectively, you requested that we comment on divergent esti- mates of the effect on women's insurance costs of S. 372, the proposed Fair Insurance Practices Act (unisex insurance). As you know, we have analyzed the general nature of these effects in our recent report, Economic Implications of the Fair Insurance Practices Act (GAO/OCE-84-1, April 6, 1984). As agreed with your offices, we did not begin work on your request until after our earlier report was completed. This report discusses the two sets of estimates cited in Senator Weicker's letter--those pre- pared by the National Organization for Women (NOW), which sup- ports the bill, and by the Insurance Services Office (ISO), which opposes it. Table 1 shows the NOW and ISO estimates of the typical differences between premiums paid by males and females in the various lines of insurance under current pricing practices.1 We conclude, first, that the concept of a typical woman is ambiguous. Different interpretations of the meaning of typical produce different estimates of the effects of the bill, and to some extent each of the estimates presented in table 1 uses a definition of typical which produces a result favorable to the position of the organization preparing the estimate. 1The implication of the estimates is that these differences would be eliminated if S. 372 were enacted. Eliminating the difference between premiums paid by men and premiums paid by women would not mean that the new unisex premiums paid by women would be $15,732 lower (NOW's estimate) or $8,455 higher (ISO's estimate) than they are now. Because the new unisex premium would most likely fall somewhere between the current premium for men and the current premium for women, the effect of the bill on raising or lowering premiums for women would be less than the current differential between men's and women's premiums. )(972120)