GEICO denies these factors are used in isolation to underwrite auto insurance.

The letter to the state insurance commissioners from Consumer Federation of America and New Jersey Citizens United Reciprocal Exchange, a nonprofit insurer, is based on a study of the underwriting criteria used by GEICO to underwrite auto insurance. The study was conducted by NJ CURE.

NJ CURE also provided a 61-page GEICO document to the National Underwriter which noted the use of education and employment as valid underwriting factors.

In response to the CFA and NJ CURE letter, GEICO said in a March 17 letter to the National Association of Insurance Commissioners that the allegations are “absolutely untrue.”

The letter, signed by Hank Nayden, GEICO vice president and legislative counsel, says that, “Despite what this letter alleges, neither education nor occupation is ever solely used to determine someone's rate. Persons of all educational levels and occupations are offered insurance at our best rate based on all criteria.”

But Eric Poe, a lawyer and accountant at NJ CURE and its vice president of operations, disagrees. He oversaw the study cited by NJ CURE and CFA in their letter to the NAIC and said that GEICO's response is misleading.

The study showed that, through use of the application on GEICO's Web site or through a telephone application, a blue collar worker in New Orleans with only a high school diploma will pay 124 percent more for auto insurance than the same driver with a white collar job and a graduate-level degree, Mr. Poe said.

It said the study shows the same results in certain cities in 44 of the 50 states.

Clearly, unlike what GEICO is saying, rates will vary depending on the type of vehicle, age and driving record of applicants, Mr. Poe said. “But, all other factors being equal, the rates will vary at GEICO based on education and employment.”

In his comments, Mr. Annotti of PCI said insurers should be able to use the most accurate underwriting and rating tools available to them.

“Arbitrary restrictions on actuarially justified rating and underwriting factors harm the insurance marketplace by stifling competition and innovation,” he commented, adding, “Restriction of this type can force consumers to pay more for insurance.”

In Mr. Annotti's view, “The bottom line is that consumers benefit when insurers seek to find more accurate ways to match rates to risk and when there are a variety of options in the marketplace. These strategies drive competition among insurers and that helps consumers by providing fairer rates and lower overall prices.”