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This Article classifies most of the public debate about classification as coming from one of two perspectives labeled traditional fair discrimination and antidiscrimination. Proponents of the status quo in classification and its regulation justify that status quo as fair discrimination. They argue that fair discrimination is both desirable and a reflection of a long-standing public policy judgment embodied in state law. Part I finds the assertion that fair discrimination is fair wanting in theory and even more deficient in practice, and rejects the contention that state law reflects a requirement or even a judgment about the wisdom of this approach.

Part I develops two alternative perspectives that should receive prominence in the classification debate: the vital importance of the personal lines of insurance to many Americans and the way competition actually functions in the insurance market. These perspectives provide additional bases of support for the ban of race, color, religion, sex, and national origin classification advocated by the antidiscriminators. They also expose the limits of antidiscrimination as a single perspective on classification reform.

Part II proposes three objectives for classification regulation: perceived fairness of the system and legitimacy of classifications used; promotion of overall loss control; and encouragement of price and service competition. The legislative initiatives described in Part III address these objectives. The initiatives recommended are in three areas that have not been included in the legislative proposals actively considered. The first legislative proposal would judge all classifications against articulated standards.The second initiative is a study of the ability of individuals to buy insurance coverage to see who cannot get insurance because it is too expensive. This study would provide the data necessary to consider whether government intervention to broaden availability is warranted for a particular coverage and what method of intervention would be best. The third recommendation is the need for legislation to encourage desirable forms of competition in the insurance market, the most important being provision of readily available and understandable consumer information. Public debate in which only the fair discrimination and antidiscrimination perspectives are recognized obscures the need for these legislative proposals.

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