Montana initiates a practical test of a major policy goal of the feminist movement today when it becomes the first state to implement "unisex" insurance legislation requiring that prices and benefits for all forms of insurance be the same for men and women.
The statute decrees that insurers may not "discriminate on the basis of sex or marital status in the issuance or operation of any type of insurance . . . . " It comes after a furious struggle pitting state and national women's groups against state and national insurance firms. Similar legislation has been defeated or sidetracked in every other state where it was introduced. A proposed federal law mandating unisex insurance policies nationwide passed a House subcommittee in 1983 but was scuttled amid strong industry lobbying.
"Montana will be the laboratory for this policy idea," said Ed Zimmerman, an attorney with the American Council of Life Insurance, a Washington-based trade group of life-insurance companies. Hawaii, North Carolina, Michigan, Massachusetts and Pennsylvania require gender-free rates for auto insurance. Under Supreme Court rulings issued in 1978 and 1983, employe pension plans at most American companies must be free of gender distinctions.
Montana is the first state to establish a unisex insurance requirement across the board. Beginning with policies issued today, an insurance company may not charge male and female Montanans different rates or pay them different premiums on life, annuity, auto, medical or disability policies.
The unisex insurance issue has been a significant battleground of the "feminist revolution" because it involves a clash of fundamental principles. The insurance business is based on the "actuarial" method devised by Sir Edmund Halley, the mathematician who computed the orbit of the comet that bears his name. Under this method, rates and premiums for individual policies are based on wide group experience. But feminists argue that a woman applying for insurance should be treated as an individual, not as part of a larger statistical universe.
Except in Montana, some automobile and almost all life and medical insurance policies have different rates and payoffs for men and women. Female teen-agers generally pay much lower rates for auto insurance because male teen-agers, as a group, drive more often and have far more accidents. The rate differential decreases as the driver ages, and auto rates are about equal for drivers older than 25.
Women are generally charged less for straight life insurance policies than men. A typical $50,000 term policy for a nonsmoker would cost a 45-year-old woman $100.50 annually, while a man the same age would pay $123, according to New York Life Insurance Co. The woman's savings are proportionately greater on larger policies.
The industry explains that because women, on average, live longer than men, insurance companies can invest a woman's premium payments longer and earn the same profit from a lower premium.
Yet, women receive lower monthly payments than men on lifetime annuity policies; because the average woman lives longer, the total payout tends to equalize.
Women under 55 generally pay considerably higher medical insurance premiums, reflecting their tendency to have medical treatment more often than men under 55.
Montana's new law forbids all these distinctions.
"It will probably turn out that women will have to pay more for auto and life insurance," said Ann L. MacIntyre, administrator of the Montana Human Rights Division, which regulates the law. "But they may pay less for medical and annuities. The real goal, though, is not just to change some rates but to have people treated equally."
MacIntyre said she hoped to prohibit insurance companies from responding to the law by raising premiums to whatever had been the highest. The state's first proposed regulations required "blended" rates higher than the current women's rate but lower than that for men. Some large insurance firms threatened to stop selling policies here if "blended" rate tables were required. The state retreated, and firms can charge both sexes the higher rate.
Zimmerman said competition among the 600 firms selling life insurance in Montana would lead to "blended" rates. "Nobody's going to be charging the man's rate for a woman's policy for very long," Zimmerman said, "because another company's going to come in with a blended rate that's lower."
Montana, the first state to elect a woman to Congress, has traditionally been a pacesetter on women's issues. While other legislatures were spurning the idea, the insurance law was enacted here in 1983 with a strong push from the Montana Women's Lobbyist Fund.
Opponents managed to delay implementation of the law until this fall, hoping the current legislature would repeal it before it took effect.
When the legislature met this spring, the state House passed a repeal bill. But the women's groups won the day in the Senate, arguing on the merits and on the premise, almost irresistible here, that the nation's first unisex insurance law would enhance Montana's position as a key policy innovator.
Staff researcher James Schwartz contributed to this report.