Connecticut Requiring P/C Insurers To Drop Use Of Price Optimization

The Connecticut Department of Insurance has begun warning insurance companies against using a controversial pricing method that relies heavily on consumer buying habits. The insurance industry is meant to use actuarial or risk-based principles to price the coverage being provided, but many insurers have been found to be using price optimization, which could be placing consumers under a great degree of financial stress. Such practices have been found in various sectors of the insurance industry and more states are beginning to place insurers under greater pressure to abandon price optimization.