Washington State Commissioner’s Move Could Increase Rates, Agents Group Says

The Washington state Insurance Commissioner’s ban on insurer use of credit scoring could result in higher insurance costs for the state’s lower-risk policyholders, according to a recent editorial in The Daily Herald in Everett, Wash.

Written by the Professional Insurance Agents Western Alliance’s Executive Vice President, the editorial explores the unintended consequences of the Commissioner’s policy decision. In fact, Washington’s state lawmakers were unwilling to enact what the Commissioner imposed unilaterally.

Dr. Charles Nyce, Professor of Risk Management and Insurance at Florida State University, explained in a recent video the types of information insurers need to make sure lower-risk policyholders pay less for coverage, and vice versa. 


FAIR Video Series: Internalizing The Cost Of Risk For Social Good

Policyholders who pose lower risks to insurers generally benefit financially by paying lower premiums. Auto insurance is a perfect example, as drivers with a safe driving record are rewarded through lower prices.

That’s what incentivizes many policyholders to behave in a less risky manner. It’s also what some insurance experts call “internalizing the cost of risk for social good.”

The Future of American Risk & Insurance (FAIR) is bringing clarity to the subject of risk-based pricing in an ongoing educational video series. 

In this segment, Dr. Charles Nyce, Florida State University Associate Professor of Risk Management and Insurance, explains how restricting insurer use of either certain risk characteristics or rating variables when pricing policies carries the risk of reducing some of the social good that insurance provides.


FAIR Video Series: How Insurance Pricing Works

The Future of American Risk & Insurance (FAIR) is taking our subscribers back to school this week to understand how lower-risk policyholders subsidize higher-risk policyholders in markets where the risk-based pricing of insurance products is either discouraged or disallowed.

In this initial segment of what will be a FAIR video series, Dr. Charles Nyce of Florida State University (FSU) explains how insurers’ rigorous data analysis allows them to understand the risks they are assuming on behalf of a policyholder and then price accurately the policies insurers sell. Both criteria must be met for risk-based pricing to exist.

Given the close regulatory scrutiny insurers face, the cost of insurance policies in the U.S. are neither excessive, inadequate, or unfairly discriminatory, he notes, while stressing risk-based pricing is essential to make sure lower-risk policyholders pay less.

Dr. Nyce is FSU’s Tallahassee, Fla.-based Robert L. Atkins Associate Professor of Risk Management and Insurance. In addition, he is the Associate Director for the Center for Risk Management Education and Research in the Department of Risk Management/Insurance, Real Estate and Legal Studies at Florida State University’s College of Business.

The video segment can be accessed below. For more information and resources, visit


Triple-I Launches FAIR 2.0

Good afternoon,

Building upon the success of its Future of American Insurance & Reinsurance (FAIR) campaign, the Insurance Information Institute (Triple-I) is unveiling today an updated FAIR 2.0 website.

The website’s address remains the same——yet its future content will be expanding to other topical issues beyond pandemic-related business income (interruption) insurance matters.

To start, FAIR 2.0 will now address growing interest surrounding risk-based pricing of insurance products with educational resources such as fact sheets and blog posts, in addition to longer white papers.

In the coming months, the Triple-I will subsequently expand FAIR 2.0’s website to include the latest news on insurer Environmental, Social, and Governance (ESG) initiatives and human-centered innovation.

The pandemic gave rise to the Triple-I’s FAIR campaign, but the insurance industry’s essential role in the U.S. economy is always evolving and we want to continue to be a resource to media, policymakers, and broader industry stakeholders.

FAIR 2.0 will tell that story.

Sean Kevelighan
President and Chief Executive Officer
Insurance Information Institute