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                        vrHE     ,~Tl?OHNI!:Y               GENEHAL

                                        OF    TEXAS




        Hon. Penn Jackson                         opinion   No. ww-339
        State Board of Insurance
        Internat ional Life Building              Be:   Whether a different     rate of
        Auntin, Texas                                   grors premiums charged male
                                                        end female riekr of the 6ame
                                                        age on the same type of policy
                                                        violate8 Article    21.21, Texan
        Dear Sir:                                       Inntirance Code.

                   You have requerted our opinion be to the proper ,conetruction
        to be given Section 4(‘7) of Article  21.21 of the Texas Ineurance Code.
        We quote from your letter 84 followo:

                     “Article   21;21, Bedtion k(7), Texan Insurance Code,
               prohibitr   unfaiti dli~rimination    in i&ruing insurance poll-
               ciee within thii State+ We perpectfully         requeet your opin-
               ion aa to whether s rate differential        and 8 groes premium
               charged male and female risks Se de6cribed above, is con-
               trary to the proririona     of Article   21.21P”

                  Article  21i21 of the Tespia Insurance Code 80 amended, Acts,
        1957, page 401, chapter 198, prohibits   “Unfair Methode of Competition
        and Unfair or Deceptive Acts or Practices 1( in the busineea of insur-
        ante . One of the prohiblted  a&n ilr “Unfair Dlrcriminatioe”  which 16
        defined in Section k(7) a6 followe:

                     “Making or permitting any unfair dircrimination    be-
               tween individual6   of the oamc cl800 and eqM1 expectation
               of life in the rater.charged    for any contract of life in-
               aurance or of life annuity or in the dividends or other
               benefit8 payable thereon, or in any other 61 the terme
               end condition6   of ruch contract ;”

                   The State Board of Inrurance in given power to determine,
        after hearing, whether ruch prohibited  acte have occurred and to ie-
        cue cease and dseist order8 in connection therewith (Sections   5, 6 and
        7 of Article 21.21).

                      This article placer the burden of fact findlng      upon the Board
        8nd   it   ie for the Board to determine tihether 8 violation     hen occurred.

                  In determining whether unfair dincriminatlon  has occurred,
        the Board must determine whether the indlvidual~  in queetion are of the
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        Eon. Penn Jackeon,   page 2 (WV-339)



        fame clase and whether the individuals  are of equal expectation   of life.
        If these questions are determined in the affirmative,  the Board muet
        then decide whether the ditrcrimlnation in ratee la unfair.    The key is
        "unfair discrimination", and thie la a factual teat within the scope
        of determination by the Board.

                                            SUMMARY

                       Under Article  21.21, Section b(7) of the
                       Insurance Code of Texas, it 18 within the
                       determination of the State Board of Insur-
                       ance whether or not a particular   fact situ-
                       ation involves unfair discrimination    in the
                       gross premiums ,charged male and female risk6
                       of the flame age on the same type of policy.

                                                        Very truly   yours,

                                                       WILL WILSON
                                                       f&;&;o~~



                                                           Richard A. Wells
                                                           Adsistant

        RAw:lm

        APPROVED:

        OPINIONCOMMITTEE

        Geo. P. Blackburn,   Chairman

        2. C. Davl6
        John Reeves
        John Webster
        Milton Richardson

        REVl3WEDFCRTREA'i?IORN.SYOENERAL
        BY:
             W. V. Geppert




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