McNamara bill would prohibit insurance companies from using data in ways that discriminate

STATE HOUSE —Rep. Joseph M. McNamara (D-Dist. 19, Warwick, Cranston) has introduced legislation that would prohibit insurance companies from using personal data in a way that could potentially discriminate against groups of people whose civil liberties are protected by law.

The bill (2022-H 7230) would prohibit the use of any external consumer data and information sources, as well as any algorithms or predictive models, in a way that unfairly discriminates based on race, color, national or ethnic origin, religion, sex, sexual orientation, disability, gender identity, or gender expression, by an insurer in regard to any insurance practice.

An insurance underwriting algorithm is a set of rules that either a computer or a human can use to make decisions about whether to sell insurance to an applicant, and how much to charge the applicant for the insurance.

“While computer programmers who build algorithms may be trying sincerely to be fair, it’s easy to see how certain raw data doesn’t take into account the civil liberties that all people enjoy under the law,” said Representative McNamara. “This legislation aims to protect citizens from this discrimination, even if that discrimination is unintentional. All of the civil rights law we’ve enacted to eliminate discrimination could be violated by insurance companies that use algorithms that strictly use raw data and come up with numbers that target specific groups.”

The act would further direct the director of business regulation, in consultation with the health insurance commissioner, to promulgate rules and regulations to enforce these provisions.

The legislation, which is cosponsored by Representatives Leonela “Leo” Felix (D-Dist. 61, Pawtucket), Karen Alzate (D-Dist. 60, Pawtucket), Brandon C. Potter (D-Dist. 16, Cranston) and Rebecca M. Kislak (D-Dist. 4, Providence), has been referred to the House Committee on Corporations.