Last Updated: 6/26/2026
In insurance, it is permissible and essential to differentiate among policyholders based on the expected risk of loss. This risk-based pricing allows insurers to charge premiums that reflect the likelihood of a claim, which is fundamental to the sustainability of the insurance system. However, not all forms of discrimination are lawful. It is illegal for insurers to engage in unfair discrimination, which occurs when pricing or access to insurance products is based on factors that are not actuarially justified and are socially or legally unacceptable—such as race, ethnicity, or national origin. The distinction lies in whether the classification is grounded in legitimate risk assessment or rooted in bias

The issue of unfair discrimination in insurance has been a topic of discussion among state insurance regulators many times over the NAIC’s 150-year history. Since as early as 1912, the NAIC has been engaged in advancing racial justice and equality within the insurance sector. In 1912, regulators conducted a study of fraternal benefit societies that targeted Black people with high-premium, low-value policies. 

 In 1940s, the NAIC first adopted the Unfair Trade Practices Act which prohibits unfair discrimination by insurers. In the 1960s and 70s, NAIC members took up redlining and insurance availability and race-based premiums in life insurance. More recently, the NAIC has studied credit-based insurance scores and investigated racial premium differences in life insurance. Although these are all important issues, NAIC members and the insurance industry recognize that there is more to be done in this area. In recent years, both the insurance industry and regulatory community have intensified their focus on critical issues such as workforce diversity and inclusion, the elimination of unfair discrimination in underwriting practices, and ensuring equitable access to insurance products for all communities

In July of 2020 at the direction of then-president Ray Farmer, the NAIC established a special committee to address issues of race and insurance. The committee was initially charged with analyzing the level of diversity and inclusion in the insurance sector and determining what barriers exist in the industry that potentially disadvantage people of color and historically underrepresented groups. The committee created five workstreams to make recommendations on action steps in various areas: diversity in the insurance industry workforce, diversity in the NAIC and regulatory community, property & casualty, life & annuities, and health. 

In 2023, the committee has focused their efforts into three workstreams: property & casualty, life & annuities, and health. The committee was disbanded in 2024 and the work of the Committee has been incorporated into the relevant letter committee workstreams and priorities.