Monitoring Availability and Affordability of Auto Insurance; Assessing Potential Evolution of the Auto Insurance Market, 28681-28683 [2021-11167]
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Federal Register / Vol. 86, No. 101 / Thursday, May 27, 2021 / Notices
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[FR Doc. 2021–11197 Filed 5–26–21; 8:45 am]
BILLING CODE P
DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
Notice of OFAC Sanctions Actions
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ACTION: Notice.
AGENCY:
The U.S. Department of the
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jbell on DSKJLSW7X2PROD with NOTICES
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VerDate Sep<11>2014
17:29 May 26, 2021
Jkt 253001
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Notice of OFAC Actions
On May 20, 2021, OFAC determined
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property subject to U.S. jurisdiction of
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below.
Individual
AL–GHAMARI, Muhammad Abd Al-Karim
(a.k.a. AL–GHAMARI, Muhammad ‘Abd-alKarim Ahmad Husayn; a.k.a. AL–
GHOMMARI, Muhammad; a.k.a.
GHOMMARI, Muhammad; a.k.a. ‘‘Sayyid
Hashim’’), Yemen; DOB 1979; alt. DOB 1984;
POB Izla Dhaen, Wahha District, Hajjar
Governorate, Yemen; nationality Yemen;
Gender Male (individual) [YEMEN].
Designated pursuant to section 1(a) of
Executive Order 13611 of May 16, 2012,
‘‘Blocking Property of Persons Threatening
the Peace, Security, or Stability of Yemen,’’
3 CFR, 2001 Comp., p. 786, 77 FR 29533
(E.O. 13611), for having engaged in acts that
directly or indirectly threaten the peace,
security, or stability of Yemen, such as acts
that obstruct the implementation of the
agreement of November 23, 2011, between
the Government of Yemen and those in
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that obstruct the political process in Yemen.
Dated: May 20, 2021.
Bradley T. Smith,
Acting Director, Office of Foreign Assets
Control, U.S. Department of the Treasury.
[FR Doc. 2021–11260 Filed 5–26–21; 8:45 am]
BILLING CODE 4810–AL–P
DEPARTMENT OF THE TREASURY
Monitoring Availability and
Affordability of Auto Insurance;
Assessing Potential Evolution of the
Auto Insurance Market
Federal Insurance Office,
Departmental Offices, Department of the
Treasury.
ACTION: Request for information.
AGENCY:
The Federal Insurance Office
(FIO) of the U.S. Department of the
Treasury (Treasury) is issuing this
Request for Information (RFI) to solicit
input regarding FIO’s future work
relating to monitoring the availability
and affordability of automobile (auto)
insurance. Building upon its prior work,
FIO will undertake a holistic analysis of
the domestic personal auto insurance
business, focusing on: (1) Affordability
of coverage and disparities in premium
pricing, with particular attention to
traditionally-underserved communities
and the impact of non-driving factors;
SUMMARY:
PO 00000
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Fmt 4703
Sfmt 4703
28681
and (2) market evolution and structural
shifts in the conduct of the business,
including the effects of technology and
the use of big data, as well as changes
related to the COVID–19 pandemic.
Additionally, FIO seeks feedback on
updating its prior work on auto
insurance, including its January 2017
Study on the Affordability of Personal
Automobile Insurance (2017 FIO
Affordability Study).
DATES: Submit written comments on or
before July 26, 2021.
ADDRESSES: Submit comments
electronically through the Federal
eRulemaking Portal at https://
www.regulations.gov, in accordance
with the instructions on that site, or by
mail to the Federal Insurance Office,
Attn: Alex Hart, Room 1410 MT,
Department of the Treasury, 1500
Pennsylvania Avenue NW, Washington,
DC 20220. Because postal mail may be
subject to processing delays, it is
recommended that comments be
submitted electronically. If submitting
comments by mail, please submit an
original version with two copies.
Comments should be captioned ‘‘FIO
Auto Insurance Study.’’ In general,
Treasury will post all comments to
www.regulations.gov without change,
including any business or personal
information provided such as names,
addresses, email addresses, or telephone
numbers. All comments, including
attachments and other supporting
materials, are part of the public record
and subject to public disclosure. You
should submit only information that
you wish to make available publicly.
FOR FURTHER INFORMATION CONTACT:
From the Federal Insurance Office: Alex
Hart, Senior Insurance Regulatory
Policy Analyst, 202–213–6850,
Alex.Hart@Treasury.gov; Daniel
McKnight, Policy Advisor, 202–631–
1979, Daniel.Mcknight@treasury.gov, or
Andrew Shaw, Senior Policy Advisor,
(202) 304–4532, Andrew.Shaw2@
Treasury.gov. Persons who have
difficulty hearing or speaking may
access these numbers via TTY by calling
the toll-free Federal Relay Service at
(800) 877–8339.
SUPPLEMENTARY INFORMATION:
I. Background
The Personal Auto Insurance Market
The U.S. personal auto insurance
sector is a significant part of the U.S.
economy, both in terms of its aggregate
size and its impact on individual
consumers and their economic wellbeing. In 2020, this line of business
accounted for approximately $247
billion of direct premiums written, or
E:\FR\FM\27MYN1.SGM
27MYN1
28682
Federal Register / Vol. 86, No. 101 / Thursday, May 27, 2021 / Notices
about 35% of the domestic property &
casualty (P&C) insurance sector’s total
premiums of $711 billion. Auto
ownership is associated with greater
opportunity for economic well-being,
such as better access to employment
opportunities.1 All U.S. states except for
New Hampshire require a driver or
owner of a motor vehicle to have auto
liability insurance or financial security,
which may be satisfied by auto liability
insurance, when registering or while
operating a motor vehicle. However, in
2019 nearly 13% of drivers in the
United States were uninsured.2
The domestic personal auto insurance
business has been evolving throughout
the 21st century. New consumer
preferences and recent technological
innovations—including the increased
use of big data and artificial
intelligence—have led to changes in
nearly all aspects of the business,
including availability of products,
pricing, underwriting, distribution,
claims adjudication and processing, and
risk management. Additionally,
developments in the sharing economy
(such as ride-sharing and delivery
services) and automation are likely to
further reshape the business in the
future. The COVID–19 pandemic
accelerated some of these changes, such
as an increased consumer preference for
usage-based insurance and telematics,
which could permanently alter the
sector.
jbell on DSKJLSW7X2PROD with NOTICES
FIO’s Previous Work on Auto Insurance
Title V of the Dodd-Frank Wall Street
Reform and Consumer Protection Act of
2010 established FIO within Treasury
and authorizes FIO to, among other
things, monitor the extent to which
traditionally underserved communities
and consumers, minorities, and lowand moderate-income (LMI) persons
have access to affordable insurance
products regarding all lines of insurance
other than health insurance.3
In 2014 and 2015, FIO issued two
public notices soliciting comments
relating to monitoring the affordability
1 FIO’s previous work on auto insurance
affordability discusses these issues in greater depth.
See Federal Insurance Office, U.S. Department of
the Treasury, Study on the Affordability of
Automobile Insurance (2017), https://
home.treasury.gov/system/files/311/
FINAL%20Auto%20Affordability%20Study_
web.pdf.
2 Insurance Research Council, ‘‘One in Eight
Drivers Uninsured,’’ news release, March 21, 2021,
https://www.insurance-research.org/sites/default/
files/downloads/UM%20NR%20032221.pdf.
3 FIO Act, 31 U.S.C. 313(a), (c)(1)(B). Title V also
designates the Secretary as advisor to the President
on ‘‘major domestic and international prudential
policy issues in connection with all lines of
insurance except health insurance.’’ Id. at sec.
321(a)(9).
VerDate Sep<11>2014
17:29 May 26, 2021
Jkt 253001
of personal auto insurance for
traditionally underserved communities
and consumers, minorities, and LMI
persons (collectively, ‘‘Affected
Persons’’).4 FIO then issued a notice in
2016 detailing a proposed methodology
for examining the affordability of
personal auto insurance (2016 FIO
Notice).5 The 2016 FIO Notice also
indicated that FIO would use available
data from the Census Bureau, statistical
agents, and certain states for an initial
affordability study, the 2017 FIO
Affordability Study.6 In addition, FIO
indicated that for a subsequent study in
2017 following the 2017 FIO
Affordability Study, FIO would request
large auto insurers (i.e., those having a
statutory surplus greater than $500
million and annually collecting more
than $500 million of premium for
personal auto insurance) to voluntarily
provide to the statistical agents with
which the insurers typically work the
following information: (i) ZIP Codelevel premium data; (ii) for liability
coverage at the financial responsibility
limit; and (iii) for the voluntary market.7
Although FIO did not proceed with this
voluntary data call to large auto
insurers, it has continued to monitor
auto insurance market developments, as
noted in its recent Annual Reports.8
Additionally, FIO’s Federal Advisory
Committee on Insurance (FACI) has
considered issues related to personal
auto insurance.9
The 2017 FIO Affordability Study
sought to provide quantifiable
information on auto insurance
affordability for Affected Persons. The
data examined by FIO for the 2017 FIO
Affordability Study did not include all
U.S. auto insurance policies. Instead, it
was based on ZIP Code-level premium
data that was voluntarily provided by
several U.S. states and a statistical
agent.10 The 2017 FIO Affordability
Study calculated and reported data
4 79 FR 19969 (Apr. 10, 2014), 80 FR 38277 (Jul.
2, 2015).
5 81 FR 45372 (July 13, 2016).
6 81 FR at 45381.
7 81 FR at 45381.
8 See, e.g., Federal Insurance Office, U.S.
Department of the Treasury, Annual Report on the
Insurance Industry (2020), 26–27, 31–32, 35,
https://home.treasury.gov/system/files/311/2020FIO-Annual-Report.pdf.
9 See, e.g., Federal Advisory Committee on
Insurance, Minutes of the Federal Advisory
Committee on Insurance (September 29, 2020),
https://home.treasury.gov/system/files/311/FACIMinutes-9-20.pdf.
10 With some state-specific exceptions, P&C
insurers generally are required by state law to send
premium, claims, and loss data to statistical agents,
who then compile the data for state insurance
departments. The states, in turn, use the reported
information to ensure that insurance rates meet
statutory standards and to monitor the insurance
market.
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Sfmt 4703
based on an Affordability Index, which
is the ratio of the average annual written
personal auto liability premium in the
voluntary market to the median
household income (based on U.S.
Census Bureau data) for U.S. Postal
Service ZIP Codes in which Affected
Persons were 50% or more of the
population. The 2017 FIO Affordability
Study indicated that approximately 18.6
million Americans live where auto
insurance costs more than 2% of
median household income.
Recent Attention on Auto Insurance
In 2020, the House Appropriations
Committee recommended that FIO
‘‘examine the impact of non-driving
related factors, such as a consumer’s
credit history, homeownership status,
census tract, marital status, professional
occupation, and educational attainment,
on the affordability of auto insurance
premiums for traditionally underserved
communities.’’ 11 President Biden also
noted differences in personal auto
insurance pricing in a televised Town
Hall meeting on February 16, 2021.12
FIO’s Upcoming Analysis of Auto
Insurance
Building upon its past work, FIO is
issuing this RFI as part of a holistic
analysis of the domestic personal auto
insurance business, focusing on the
following key themes:
(1) Affordability of coverage and
premium pricing disparities—with
particular attention to traditionally
underserved communities and
considering the impact of non-driving
factors—including an analysis of
available data and an update of FIO’s
past work on auto insurance, and
(2) market evolution and structural
shifts in the conduct of business,
including the effects of technology and
the use of big data, as well as changes
related to the COVID–19 pandemic.
II. Request for Comments
FIO invites comments on the
following questions:
Data Analysis
1. Please provide your views on FIO
updating its 2017 FIO Affordability
Study. How could the 2017 FIO
11 U.S. House of Representatives Committee on
Appropriations, Report together with Minority
Views to Accompany H.R. 7668 (116th Congress,
2nd Session), https://www.congress.gov/116/crpt/
hrpt456/CRPT-116hrpt456.pdf.
12 President Joseph R. Biden, Jr., ‘‘Remarks by
President Biden in a CNN Town Hall with
Anderson Cooper,’’ (remarks, CNN Town Hall,
Milwaukee, WI, February 16, 2021), https://
www.whitehouse.gov/briefing-room/speechesremarks/2021/02/17/remarks-by-president-bidenin-a-cnn-town-hall-with-anderson-cooper/.
E:\FR\FM\27MYN1.SGM
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Federal Register / Vol. 86, No. 101 / Thursday, May 27, 2021 / Notices
Affordability Study methodology and
reporting be improved? What time
period should be covered in an updated
study? Should FIO update the study on
a periodic basis, and if so, how
frequently?
2. What data should FIO use to update
the 2017 FIO Affordability Study? For
example, should FIO proceed with the
proposed data collection outlined in the
2016 FIO Notice (i.e., a request for
voluntary production of ZIP Code-level
premium data limited to large insurers
that have a statutory surplus greater
than $500 million and that annually
collect more than $500 million of
premium for personal auto insurance)?
Why or why not? What alternate
criteria, if any, would you propose if
FIO administers a data collection?
3. Some recent auto insurance
affordability analyses have leveraged
rating databases to study how quoted
policy pricing varies based on
demographic and geographic inputs.
Should FIO consider an analysis of
affordability using premium quotations?
Why or why not? If yes, what data
sources are available?
4. Are there other quantitative
approaches that FIO could take to
effectively study auto insurance
affordability? If yes, what are the
approaches and their corresponding,
available data sources?
jbell on DSKJLSW7X2PROD with NOTICES
Non-Driving Related Factors in Personal
Auto Insurance Underwriting and
Pricing
5. What should be the role of nondriving related factors (such as a
consumer credit history,
homeownership status, census tract,
marital status, professional occupation,
and educational attainment) in personal
auto insurance underwriting and
pricing?
6. How should FIO assess the use of
such non-driving related factors? What
principles should be used to distinguish
between appropriate and inappropriate
use of non-driving related factors in
personal auto insurance underwriting
and pricing? What metrics could FIO
use to assess the impact of non-driving
related factors on the affordability and
accessibility of auto insurance? What
data sources are available to help assess
these factors?
Structural Market Changes in Personal
Auto Insurance
7. What drivers of change (e.g.,
specific technology advances, consumer
preferences, the entrance of auto
manufacturers in underwriting and
issuing insurance policies, etc.) are
currently having, or likely to have,
significant effects on the structure of the
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17:29 May 26, 2021
Jkt 253001
personal auto insurance business?
Please describe these likely impacts and
why they are occurring.
8. What responses to the COVID–19
pandemic—whether by consumers, the
insurance industry, or insurance
regulators—have the greatest likelihood
of leading to long-term structural change
in auto insurance? How can FIO
evaluate the potential long-term or
permanent effects of the pandemic on
the personal auto insurance business?
9. What are the biggest challenges and
opportunities for the personal auto
insurance business resulting from
current and anticipated structural
changes? How are ongoing structural
changes affecting underwriting and
pricing practices?
10. Please describe how big data is
being used in the personal auto
insurance business. What are the
benefits and risks to both consumers
and insurers in the use of big data,
particularly as it relates to auto
insurance underwriting and pricing?
11. Please provide your views on how
FIO can quantify structural changes to
the personal auto insurance market and
their potential effects.
General
12. Please provide any additional
comments or information on other
issues or topics that may be relevant to
FIO’s work on personal auto insurance,
the 2017 FIO Affordability Study, or
other related matters.
Steven Seitz,
Director, Federal Insurance Office.
[FR Doc. 2021–11167 Filed 5–26–21; 8:45 am]
BILLING CODE 4810–AK–P
DEPARTMENT OF THE TREASURY
Agency Information Collection
Activities; Submission for OMB
Review; Comment Request; Multiple
Internal Revenue Service Information
Collection Requests
Departmental Offices, U.S.
Department of the Treasury.
ACTION: Notice.
AGENCY:
The Department of the
Treasury will submit the following
information collection requests to the
Office of Management and Budget
(OMB) for review and clearance in
accordance with the Paperwork
Reduction Act of 1995, on or after the
date of publication of this notice. The
public is invited to submit comments on
these requests.
DATES: Comments must be received on
or before June 28, 2021.
SUMMARY:
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28683
Written comments and
recommendations for the proposed
information collection should be sent
within 30 days of publication of this
notice to www.reginfo.gov/public/do/
PRAMain. Find this particular
information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
search function.
FOR FURTHER INFORMATION CONTACT:
Copies of the submissions may be
obtained from Molly Stasko by emailing
PRA@treasury.gov, calling (202) 622–
8922, or viewing the entire information
collection request at www.reginfo.gov.
SUPPLEMENTARY INFORMATION:
ADDRESSES:
Internal Revenue Service (IRS)
1. Title: Employee Representative’s
Quarterly Railroad Tax Return.
OMB Control Number: 1545–0002.
Type of Review: Extension of a
currently approved collection.
Description: Employee representatives
file Form CT–2 quarterly to report
compensation on which railroad
retirement taxes are due. The IRS uses
this information to ensure that
employee representatives have paid the
correct tax. Form CT–2 also transmits
the tax payment.
Form Number: IRS Form CT–2.
Affected Public: Individuals or
Households.
Estimated Number of Respondents:
112.
Frequency of Response: Quarterly.
Estimated Total Number of Annual
Responses: 112.
Estimated Time per Respondent: 1
hour 11minutes.
Estimated Total Annual Burden
Hours: 132 hours.
2. Title: Cancellation of Debt.
OMB Control Number: 1545–1424.
Type of Review: Extension of a
currently approved collection.
Description: Form 1099–C is used by
Federal government agencies, financial
institutions, and credit unions to report
the cancellation or forgiveness of a debt
of $600 or more, as required by section
6050P of the Internal Revenue Code.
The IRS uses the form to verify
compliance with the reporting rules and
to verify that the debtor has included
the proper amount of canceled debt in
income on his or her income tax return.
These regulations under section 6050P
of the Internal Revenue Code (Code),
relating to the rule in § 1.6050P–
1(b)(2)(iv) that the 36-month nonpayment testing period is an identifiable
event triggering an information
reporting obligation on Form 1099–C for
discharge of indebtedness by certain
entities.
E:\FR\FM\27MYN1.SGM
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Agencies
[Federal Register Volume 86, Number 101 (Thursday, May 27, 2021)]
[Notices]
[Pages 28681-28683]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-11167]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Monitoring Availability and Affordability of Auto Insurance;
Assessing Potential Evolution of the Auto Insurance Market
AGENCY: Federal Insurance Office, Departmental Offices, Department of
the Treasury.
ACTION: Request for information.
-----------------------------------------------------------------------
SUMMARY: The Federal Insurance Office (FIO) of the U.S. Department of
the Treasury (Treasury) is issuing this Request for Information (RFI)
to solicit input regarding FIO's future work relating to monitoring the
availability and affordability of automobile (auto) insurance. Building
upon its prior work, FIO will undertake a holistic analysis of the
domestic personal auto insurance business, focusing on: (1)
Affordability of coverage and disparities in premium pricing, with
particular attention to traditionally-underserved communities and the
impact of non-driving factors; and (2) market evolution and structural
shifts in the conduct of the business, including the effects of
technology and the use of big data, as well as changes related to the
COVID-19 pandemic. Additionally, FIO seeks feedback on updating its
prior work on auto insurance, including its January 2017 Study on the
Affordability of Personal Automobile Insurance (2017 FIO Affordability
Study).
DATES: Submit written comments on or before July 26, 2021.
ADDRESSES: Submit comments electronically through the Federal
eRulemaking Portal at https://www.regulations.gov, in accordance with
the instructions on that site, or by mail to the Federal Insurance
Office, Attn: Alex Hart, Room 1410 MT, Department of the Treasury, 1500
Pennsylvania Avenue NW, Washington, DC 20220. Because postal mail may
be subject to processing delays, it is recommended that comments be
submitted electronically. If submitting comments by mail, please submit
an original version with two copies. Comments should be captioned ``FIO
Auto Insurance Study.'' In general, Treasury will post all comments to
www.regulations.gov without change, including any business or personal
information provided such as names, addresses, email addresses, or
telephone numbers. All comments, including attachments and other
supporting materials, are part of the public record and subject to
public disclosure. You should submit only information that you wish to
make available publicly.
FOR FURTHER INFORMATION CONTACT: From the Federal Insurance Office:
Alex Hart, Senior Insurance Regulatory Policy Analyst, 202-213-6850,
[email protected]; Daniel McKnight, Policy Advisor, 202-631-1979,
[email protected], or Andrew Shaw, Senior Policy Advisor,
(202) 304-4532, [email protected]. Persons who have difficulty
hearing or speaking may access these numbers via TTY by calling the
toll-free Federal Relay Service at (800) 877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
The Personal Auto Insurance Market
The U.S. personal auto insurance sector is a significant part of
the U.S. economy, both in terms of its aggregate size and its impact on
individual consumers and their economic well-being. In 2020, this line
of business accounted for approximately $247 billion of direct premiums
written, or
[[Page 28682]]
about 35% of the domestic property & casualty (P&C) insurance sector's
total premiums of $711 billion. Auto ownership is associated with
greater opportunity for economic well-being, such as better access to
employment opportunities.\1\ All U.S. states except for New Hampshire
require a driver or owner of a motor vehicle to have auto liability
insurance or financial security, which may be satisfied by auto
liability insurance, when registering or while operating a motor
vehicle. However, in 2019 nearly 13% of drivers in the United States
were uninsured.\2\
---------------------------------------------------------------------------
\1\ FIO's previous work on auto insurance affordability
discusses these issues in greater depth. See Federal Insurance
Office, U.S. Department of the Treasury, Study on the Affordability
of Automobile Insurance (2017), https://home.treasury.gov/system/files/311/FINAL%20Auto%20Affordability%20Study_web.pdf.
\2\ Insurance Research Council, ``One in Eight Drivers
Uninsured,'' news release, March 21, 2021, https://www.insurance-research.org/sites/default/files/downloads/UM%20NR%20032221.pdf.
---------------------------------------------------------------------------
The domestic personal auto insurance business has been evolving
throughout the 21st century. New consumer preferences and recent
technological innovations--including the increased use of big data and
artificial intelligence--have led to changes in nearly all aspects of
the business, including availability of products, pricing,
underwriting, distribution, claims adjudication and processing, and
risk management. Additionally, developments in the sharing economy
(such as ride-sharing and delivery services) and automation are likely
to further reshape the business in the future. The COVID-19 pandemic
accelerated some of these changes, such as an increased consumer
preference for usage-based insurance and telematics, which could
permanently alter the sector.
FIO's Previous Work on Auto Insurance
Title V of the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 established FIO within Treasury and authorizes
FIO to, among other things, monitor the extent to which traditionally
underserved communities and consumers, minorities, and low- and
moderate-income (LMI) persons have access to affordable insurance
products regarding all lines of insurance other than health
insurance.\3\
---------------------------------------------------------------------------
\3\ FIO Act, 31 U.S.C. 313(a), (c)(1)(B). Title V also
designates the Secretary as advisor to the President on ``major
domestic and international prudential policy issues in connection
with all lines of insurance except health insurance.'' Id. at sec.
321(a)(9).
---------------------------------------------------------------------------
In 2014 and 2015, FIO issued two public notices soliciting comments
relating to monitoring the affordability of personal auto insurance for
traditionally underserved communities and consumers, minorities, and
LMI persons (collectively, ``Affected Persons'').\4\ FIO then issued a
notice in 2016 detailing a proposed methodology for examining the
affordability of personal auto insurance (2016 FIO Notice).\5\ The 2016
FIO Notice also indicated that FIO would use available data from the
Census Bureau, statistical agents, and certain states for an initial
affordability study, the 2017 FIO Affordability Study.\6\ In addition,
FIO indicated that for a subsequent study in 2017 following the 2017
FIO Affordability Study, FIO would request large auto insurers (i.e.,
those having a statutory surplus greater than $500 million and annually
collecting more than $500 million of premium for personal auto
insurance) to voluntarily provide to the statistical agents with which
the insurers typically work the following information: (i) ZIP Code-
level premium data; (ii) for liability coverage at the financial
responsibility limit; and (iii) for the voluntary market.\7\ Although
FIO did not proceed with this voluntary data call to large auto
insurers, it has continued to monitor auto insurance market
developments, as noted in its recent Annual Reports.\8\ Additionally,
FIO's Federal Advisory Committee on Insurance (FACI) has considered
issues related to personal auto insurance.\9\
---------------------------------------------------------------------------
\4\ 79 FR 19969 (Apr. 10, 2014), 80 FR 38277 (Jul. 2, 2015).
\5\ 81 FR 45372 (July 13, 2016).
\6\ 81 FR at 45381.
\7\ 81 FR at 45381.
\8\ See, e.g., Federal Insurance Office, U.S. Department of the
Treasury, Annual Report on the Insurance Industry (2020), 26-27, 31-
32, 35, https://home.treasury.gov/system/files/311/2020-FIO-Annual-Report.pdf.
\9\ See, e.g., Federal Advisory Committee on Insurance, Minutes
of the Federal Advisory Committee on Insurance (September 29, 2020),
https://home.treasury.gov/system/files/311/FACI-Minutes-9-20.pdf.
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The 2017 FIO Affordability Study sought to provide quantifiable
information on auto insurance affordability for Affected Persons. The
data examined by FIO for the 2017 FIO Affordability Study did not
include all U.S. auto insurance policies. Instead, it was based on ZIP
Code-level premium data that was voluntarily provided by several U.S.
states and a statistical agent.\10\ The 2017 FIO Affordability Study
calculated and reported data based on an Affordability Index, which is
the ratio of the average annual written personal auto liability premium
in the voluntary market to the median household income (based on U.S.
Census Bureau data) for U.S. Postal Service ZIP Codes in which Affected
Persons were 50% or more of the population. The 2017 FIO Affordability
Study indicated that approximately 18.6 million Americans live where
auto insurance costs more than 2% of median household income.
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\10\ With some state-specific exceptions, P&C insurers generally
are required by state law to send premium, claims, and loss data to
statistical agents, who then compile the data for state insurance
departments. The states, in turn, use the reported information to
ensure that insurance rates meet statutory standards and to monitor
the insurance market.
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Recent Attention on Auto Insurance
In 2020, the House Appropriations Committee recommended that FIO
``examine the impact of non-driving related factors, such as a
consumer's credit history, homeownership status, census tract, marital
status, professional occupation, and educational attainment, on the
affordability of auto insurance premiums for traditionally underserved
communities.'' \11\ President Biden also noted differences in personal
auto insurance pricing in a televised Town Hall meeting on February 16,
2021.\12\
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\11\ U.S. House of Representatives Committee on Appropriations,
Report together with Minority Views to Accompany H.R. 7668 (116th
Congress, 2nd Session), https://www.congress.gov/116/crpt/hrpt456/CRPT-116hrpt456.pdf.
\12\ President Joseph R. Biden, Jr., ``Remarks by President
Biden in a CNN Town Hall with Anderson Cooper,'' (remarks, CNN Town
Hall, Milwaukee, WI, February 16, 2021), https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/02/17/remarks-by-president-biden-in-a-cnn-town-hall-with-anderson-cooper/.
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FIO's Upcoming Analysis of Auto Insurance
Building upon its past work, FIO is issuing this RFI as part of a
holistic analysis of the domestic personal auto insurance business,
focusing on the following key themes:
(1) Affordability of coverage and premium pricing disparities--with
particular attention to traditionally underserved communities and
considering the impact of non-driving factors--including an analysis of
available data and an update of FIO's past work on auto insurance, and
(2) market evolution and structural shifts in the conduct of
business, including the effects of technology and the use of big data,
as well as changes related to the COVID-19 pandemic.
II. Request for Comments
FIO invites comments on the following questions:
Data Analysis
1. Please provide your views on FIO updating its 2017 FIO
Affordability Study. How could the 2017 FIO
[[Page 28683]]
Affordability Study methodology and reporting be improved? What time
period should be covered in an updated study? Should FIO update the
study on a periodic basis, and if so, how frequently?
2. What data should FIO use to update the 2017 FIO Affordability
Study? For example, should FIO proceed with the proposed data
collection outlined in the 2016 FIO Notice (i.e., a request for
voluntary production of ZIP Code-level premium data limited to large
insurers that have a statutory surplus greater than $500 million and
that annually collect more than $500 million of premium for personal
auto insurance)? Why or why not? What alternate criteria, if any, would
you propose if FIO administers a data collection?
3. Some recent auto insurance affordability analyses have leveraged
rating databases to study how quoted policy pricing varies based on
demographic and geographic inputs. Should FIO consider an analysis of
affordability using premium quotations? Why or why not? If yes, what
data sources are available?
4. Are there other quantitative approaches that FIO could take to
effectively study auto insurance affordability? If yes, what are the
approaches and their corresponding, available data sources?
Non-Driving Related Factors in Personal Auto Insurance Underwriting and
Pricing
5. What should be the role of non-driving related factors (such as
a consumer credit history, homeownership status, census tract, marital
status, professional occupation, and educational attainment) in
personal auto insurance underwriting and pricing?
6. How should FIO assess the use of such non-driving related
factors? What principles should be used to distinguish between
appropriate and inappropriate use of non-driving related factors in
personal auto insurance underwriting and pricing? What metrics could
FIO use to assess the impact of non-driving related factors on the
affordability and accessibility of auto insurance? What data sources
are available to help assess these factors?
Structural Market Changes in Personal Auto Insurance
7. What drivers of change (e.g., specific technology advances,
consumer preferences, the entrance of auto manufacturers in
underwriting and issuing insurance policies, etc.) are currently
having, or likely to have, significant effects on the structure of the
personal auto insurance business? Please describe these likely impacts
and why they are occurring.
8. What responses to the COVID-19 pandemic--whether by consumers,
the insurance industry, or insurance regulators--have the greatest
likelihood of leading to long-term structural change in auto insurance?
How can FIO evaluate the potential long-term or permanent effects of
the pandemic on the personal auto insurance business?
9. What are the biggest challenges and opportunities for the
personal auto insurance business resulting from current and anticipated
structural changes? How are ongoing structural changes affecting
underwriting and pricing practices?
10. Please describe how big data is being used in the personal auto
insurance business. What are the benefits and risks to both consumers
and insurers in the use of big data, particularly as it relates to auto
insurance underwriting and pricing?
11. Please provide your views on how FIO can quantify structural
changes to the personal auto insurance market and their potential
effects.
General
12. Please provide any additional comments or information on other
issues or topics that may be relevant to FIO's work on personal auto
insurance, the 2017 FIO Affordability Study, or other related matters.
Steven Seitz,
Director, Federal Insurance Office.
[FR Doc. 2021-11167 Filed 5-26-21; 8:45 am]
BILLING CODE 4810-AK-P