Act of 1979, that is, bringing the insurance industry under the umbrella of what literally may be described as a Civil Rights Act. To assume that property insurers conduct their business with the intent to discriminate against minorities or other segments of society would be simplistic reasoning at best. The primary responsibility of the property insurance underwriter is to evaluate specific characteristics of the property being insured. Underwriting standards do not take into consideration an insurance applicant's nationality, skin color or religion. These factors do not inform the underwriter about the risk of loss. Some property risks, by reason of their hazardous nature, cannot be written under the competitive market conditions prevailing today. They are insured by State Fair Plans established to underwrite such high risk properties. In effect, the entire property insurance industry shares in the exposure presented by the high risk property. There is no discriminatory motive of the insurance industry behind a property insurance appliacnt being placed in a FAIR Plan. S. 506 would pose substantial hardship on a property insurance company which as a matter of sound business principle restricts its writing of “high risk" properties. The insurer, underwritting risks in good faith, could be accused of discriminating against the insurance applicant, when actually the condition of the property precluded it from being underwritten by a company outside the FAIR Plan. Discriminatory intent or purpose implies more than intent as volition or intent as awareness of consequences. It implies that the decision maker, in this case a property insurance underwriter, selected or reaffirmed a particular course of action at least in part "because of", not merely "inspite of", its adverse effects upon an identifiable group. Sound underwriting requires selectivity and consequently, some risks will be rejected. Requiring underwriters to evaluate business decisions in the light of their potential discriminatory impact on certain segments of the society would result in the insurance industry becoming merely a social agency. NAII recognizes that property insurance has become even more essential to our country's citizens' ability to obtain adequate housing. With the rest of the insurance industry in this country, we share in the responsibility of keeping property insurance both available and affordable to all citizens. Discrimination in the marketing of hazard or dwelling insurance would obviously be unacceptable if found to exist, but we do not view S. 506 as the proper manner in which to safeguard insurance consumers. On the contrary NAII urges Congress to avoid creating an overlapping and dual scheme of regulation over the insurance industry which would result if insurers were brought within the parameters of the Fair Housing Act. An excess in regulation can only guarantee greater expense to the American insurance consumer as well as to our insurance industry. We are certain that each state, through its Insurance Commissioner, has the power and is regulating and investigating any charge of discriminaiton that may arise within that jurisdiction. NAII is also convinced that model legislative reform measures finalized by the National Association of Insurance Commissioners will assure the insurance consumer even greater legal recourse in the event that there is a suspition of discrimination by an insurance company. Accordingly, NAII strongly recommends that Congress disapprove Section 6(c) of S. 506. Yours very truly, ARTHUR C. MERTZ, President. FORT BRAGG, CALIF., April 26, 1979. Re: S. 506-To Prohibit Housing Discrimination. DEAR SENATOR BAYH AND MEMBERS OF THE SUBCOMMITTEE: I would like to communicate to you my very strong support for S. 506 which would help to prohibit housing discrimination by granting the Department of Housing and Urban Development greater power to enforce federal laws against discrimination in housing. The problem with current legislation is clearly that HUD has little or no enforcement power to ensure that the Fair Housing Amendments of 1979 to the Civil Rights Act of 1968 are fairly and firmly implemented. The problems of redlining by residential property insurers, discrimination against the handicapped, and racial discrimination are still with us. I believe that HUD should be granted the authority to issue cease and desist orders to remedy housing discrimination, and that the Justice Department should be authorized to bring suits at the request of HUD. I have had a lifetime of observing the evil results of housing discrimination. I urge the subcommittee's support of S. 506, and its speedy reporting to the full Senate Judiciary Committee. Best regards, RON GUENTHER. THE COURT BELOW DID NOT ERR IN APPROVING A. None of the Terms of the Settlement 1. The District Court properly held 12 14 15 2. The terms of the Settlement Agreement that affect Milloway are 20 3. The terms of the Settlement Agreement 24 |