American Property Casualty Insurance Association
  • Staff Contact: Nicole Mahrt-Ganley     
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Nicole Mahrt Ganley


916-440-1116 or cell 916 616-5855




January 29, 2014

ACIC Says Consumers Benefit from Use of Affinity Groups To Price Insurance

SACRAMENTO, CA – A petition filed by Consumer Watchdog to prevent the use of affinity groups for the purpose of pricing auto insurance is misguided, not necessary and would harm consumers, says the Association of California Insurance Companies (ACIC).

“The loss experience of certain affinity groups is better than for other policyholders and its only fair that members of those groups should benefit from that with lower premiums. In addition, offering coverage to a specific group like members of the military, firefighters, police or teachers saves marketing costs and those reduced costs are passed along to the consumer,” said Mark Sektnan, ACIC president. “Insurers in California follow Proposition 103 and all the laws and regulations. Keep in mind that the California Department of Insurance must approve all rating plans before they can be implemented in the market. And, in fact, the California Department of Insurance’s own filing instructions specifically allow for such use.”

All 50 states require insurers to charge actuarially appropriate rates. Affinity groups are offered in all 50 states.  The issue of education and occupation has been thoroughly studied by objective third parties.  State agencies charged with enforcing insurance laws in states such as Maryland and New Jersey have reviewed insurers’ use of rating factors such as education and occupation and found such use to be, without question, actuarially justified.

“Each policy is underwritten based on the individual’s risk of loss,” said Sektnan.  “Consumers want to be charged premiums that reflect their level of risk.  We know that certain occupations are correlated with a lower level of risk and therefore, all other risks being equal, are offered a lower rate.  Many of the participants of affinity groups are hardworking teachers, police, fire fighters and members of our military.”

The Association of California Insurance Companies (ACIC) is part of the Property Casualty Insurers Association of America (PCI). ACIC is PCI’s California Voice representing 363 property casualty insurance companies doing business in California. These members write $20.2 billion in premium in California insuring 36 percent of the property casualty insurance sold in the state. California members write 44 percent of personal auto insurance, 29 percent of homeowners insurance, 33 percent of commercial lines business insurance and 40 percent of private workers compensation insurance sold in California.