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Montana law allowing marriage, sex to factor into insurance rates challenged

HELENA – A lawsuit filed Wednesday challenged the constitutionality of a 2021 law that allowed insurance companies in Montana to factor sex and marital status into risk calculations.

Financial institutions in Montana still cannot discriminate based solely on gender or marital status. However, under the 2021 law, lawmakers carved out an exception that allows companies to use a person’s gender and marital status as a data point to assess risk and set insurance premiums.

In a press release Thursday, the plaintiffs’ attorneys said the law violated the state constitution, which prohibits discrimination based on sex and “broadly protects against treating people differently based on irrational classifications.”

The plaintiffs are represented by attorneys with Upper Seven Law as well as former Democratic legislator Kimberly Dudik. They filed the suit in Lewis and Clark County Court. Montana State Rep. Sue Vinton, R-Billings, carried House Bill 379, which created the exception.

“Lawmakers claimed that HB 379 would be especially good for women, but failed to scrutinize the data,” according to the press release from Upper Seven Law.

The case is another of about a dozen lawsuits filed against bills passed during the 2021 legislative session. Upper Seven Law was part of the legal team that obtained a permanent injunction on various 2021 election laws.

Montana State Auditor and Commissioner of Securities and Insurance Troy Downing is named as a defendant in the lawsuit. Downing’s spokesman Sam Loveridge said in a statement Thursday that all rates submitted to the auditor’s office are “reviewed to ensure they are not excessive, inadequate or unfairly discriminatory.”

“Our office requires companies to clearly demonstrate that the gender-separate premium rates are actuarially justified,” Loveridge said.

The plaintiffs’ attorney Rylee Sommers-Flanagan said the issue is not just the law that allows insurance companies to use data about sex and marital status to set premiums. The law makes using these factors a non-discriminatory practice, which Sommers-Flanagan said means people can’t use the Montana Human Rights Bureau to seek help with discriminatory insurance provisions.

The Montana human rights process can save people time and money when seeking relief from discrimination, Sommers-Flanagan said. Without that, anyone challenging an insurance rate as discriminatory would have to challenge it in court on a constitutional basis, she said.

Kyle Schmauch, a spokesman for legislative majority leadership, said the bill brings Montana in line with 49 other states with similar laws. Insurance companies already use sex as a factor in assessing risk in, for example, car insurance, Schmauch said. Some plans see women as less risky drivers, and therefore have lower premiums, he said.

However, Montana’s unisex requirement for insurance has not led insurance companies to create a unisex risk assessment, Schmauch said. Instead, companies used the men’s rate, which cost women more money, he said.

Plaintiffs disagreed, and in their press release called insurance rates based on sex alone “arbitrarily discriminatory” that could lead to “inconsistent and inconsistent rate determinations.”

“As a result, both men and women face unpredictable discrimination in different insurance markets,” the release said.

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