Unisex Legislation

Unisex legislation is relatively new and prohibits insurance companies from taking into consideration gender when issuing policies.

Unisex legislation states that all people, regardless of gender, must be treated the same by insurers when setting rates and product offerings. Even though gender is not a factor when determining insurance rates, there are many examples across multiple forms of insurance where one gender is paying more than the other. A commonly found example of this is with automobile insurance, where men, especially young men, pay higher rates than women. From a legal standpoint, this is not due to gender, but instead to how the claims and risks are historically trending.

The state of Montana took the lead with unisex legislation passing the first law in the nation in 1985, which prevented insurance companies from using gender when establishing rates and benefits. Montana’s unique insurance law was passed on the basis of complaints by women stating that different premium rates for men and women, based on statistical records comparing the two groups' risk of loss, was discriminatory. The Montana women who fought for unisex insurance cited the state’s tradition of leadership in women's rights. For example, Montana women secured the right to vote six years before the rest of the country.

An area of controversy when the law first passed was with life insurance policies, where insurance companies were no longer allowed to use gender as a basis for setting premiums or benefits, just as the use of race, color, religion, marital status and national origin were prohibited. The insurance companies argued that women were hurting themselves as life insurance policies typically cost less for women, given they outlive men on average. But the women counter-argued that men were receiving larger payouts on their policies.

One of the most complex areas of interpretation of unisex legislation today is seen in transgender cases. Many health plans still exclude coverage for sex change or sex reassignment surgery. Coverage varies by state.

The modern controversy over unisex legislation for transgender people is rooted in a long history of disputes waged by women and others. The perseverance of the sole female member of the British government during Victorian times led to the establishment of a separate wash room for women in 1905. For many years the United States practiced racial segregation and blacks and whites could not drink from the same water fountain until as recently as the 1960s. People with disabilities also fought for access to public restrooms and now have stalls specifically designed for them.

For transgender people, traditional sex-segregated public restrooms can bring risk of being insulted, attacked and even arrested. This modern-era issue is highly polarizing and will likely play out within the insurance markets on a state-by-state basis for the foreseeable future.