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Paul Zimmerman

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And Then There Were Three

Attention insurers that issue policies of automobile insurance in the Golden State, there’s a third gender choice soon to be available on California driver’s licenses – non-binary – and you may have to adjust your rate plans accordingly.

Beginning on January 1, 2019, applicants for driver’s licenses in California who don’t identify as exclusively male or female will be able to choose non-binary as their gender; this by virtue of the passage of SB179 (the Gender Recognition Act), which was recently signed into law by Governor Jerry Brown. The Act recognizes the non-binary category and makes it easier for people to change their names and gender on state identification papers (no physician statement or court order required). No doubt, this new law will have a particularly interesting impact upon the insurance industry, though it’s too early to grasp the full extent.

That being said, we know the following to be true: the California Department of Insurance will expect all insurers admitted in California to comply with the legislation. Given that gender is an optional factor in developing rates for automobile insurance, companies that don’t consider an applicant’s sex in their rate plans will seemingly be unaffected by the law. On the other hand, those that take gender into account must support the rates applied to non-binary insureds with convincing evidence that the rates charged are fair and reasonable in the absence of measurable data. For the time being, the CDI, which will not be issuing a bulletin on the issue, will accept the most consumer friendly rate available (the lower of the applicable male and female rates).

Of note, the Gender Recognition Act will likely have a significant effect on the life insurance business as well. As the law’s impact comes more clearly into focus as it applies to both lines of coverage (auto and life), more information and practical analysis will be provided. Until then, understand that California isn’t alone in its recognition of non-binary individuals. The District of Columbia and Oregon offer the gender-neutral choice of "X" on driver licenses and identification cards (Washington allows birth certificates to be issued with the gender identity of “X”) and similar legislation is currently pending in New York and Vermont.

This blog post is not offered as, and should not be relied upon as, legal advice. You should consult an attorney for advice in specific situations.