SENATE BILL REPORT

                   SB 5426

                    As of January 30, 1995

Title:  An act relating to criteria to be used when rating senior citizens for private passenger automobile insurance.

Brief Description:  Using age as a rating factor for auto insurance.

Sponsors:  Senators Fraser, Pelz, Fairley, Prentice and Kohl; by request of Insurance Commissioner.

Brief History:

Committee Activity:  Financial Institutions & Housing:  1/31/95.

SENATE COMMITTEE ON FINANCIAL INSTITUTIONS & HOUSING

Staff:  Erika Lim (786-7488)

Background:  Age is a factor that is sometimes considered by an insurance company when determining private passenger automobile insurance rates.  For example, a 16 year-old must often pay a higher premium than a 21 year-old.  For young drivers, the premium rates often change annually.  Some insurance companies consider advancing age when determining rates and charge higher premiums for senior citizens than for non-senior citizens.  When these increases are imposed at intervals of more than one year -- for example, every five years -- the resulting jump in the premium amount can be substantial.

Summary of Bill:  Insurers who consider age a factor when computing private passenger automobile insurance rates may not increase a premium based on a driver's advancing age more than 5 percent per year.  

Appropriation:  None.

Fiscal Note:  Not requested.

Effective Date:  The bill takes effect on January 1, 1996.