August 10, 1999
The Honorable Charles E. Grassley
United States Senate
Washington, D.C. 20510-1501
Dear Senator Grassley:
I am responding to your letter on behalf of your constituent, xxx xxxxxx xx xxxxxx. xxx xxxxxx wrote to you inquiring whether her automobile insurance company's policy of providing a premium discount for "good students" who maintain a grade point average of "B" or better violates the Americans with Disabilities Act (ADA).
Title III of the ADA prohibits discrimination on the basis of disability by places of public accommodation, including service establishments such as insurance companies. Therefore, an insurance company may be prohibited by the ADA from discriminating on the basis of disability in making decisions to grant or deny coverage, and in setting rates for types of coverage. However, because of the nature of the insurance business, an insurer may underwrite, classify, or administer risks that are based on, or not inconsistent with, State law, provided that such practices are not used to evade the purposes of the ADA.
In her letter, xxx xxxxxx indicates that it would be difficult for her son, who has a learning disability, to maintain a grade point average of "B" or better. xxx xxxxxx, therefore, believes that her automobile insurer's policy of providing a premium discount for "good students" is discriminatory towards her son and other students who do not have "the mental capacity" to achieve a B-average or better. The ADA prohibits insurers from making disability-based distinctions that lack an actuarial basis or are unrelated to actual or reasonably anticipated experience. In this case, the insurance company is making a distinction based on school performance, not disability. The automobile insurer is providing all policy holders with a "good students" premium discount without regard to disability. Therefore, the policy of providing a premium discount to "good students" does not appear to violate the ADA.
If xxx xxxxxx has additional questions, the Department maintains a telephone information line to provide technical assistance regarding the rights and obligations of individuals, businesses, agencies, and others covered or protected by the ADA. This technical assistance is available by calling 800-514-0301 (Voice) or 800-514-0383 (TDD).
I hope this information is helpful to you in responding to your constituent. Please do not hesitate to contact the Department if we can be of assistance in other matters.
Bill Lann Lee
Civil Rights Division>