But Eric Poe, a lawyer and accountant at NJ CURE and its vice president of operations, disagrees. After overseeing a study cited by NJ CURE and CFA in their letter to the NAIC, he said 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.

He said the study shows the same results in certain cities in 44 of the 50 states. He added that unlike what GEICO is saying, while rates might also vary depending on the type of vehicle, age and driving record of applicants, “all other factors being equal, the rates will vary at GEICO based on education and employment.”

Earlier this month, New Jersey Assemblyman Neil Cohen, D-Union, introduced a bill–A2819–to bar the use of education and occupation as auto rating factors, as well as the collection of such information for an initial application or renewal.

“It is unrelated to someone's ability to drive and their filing a claim in the future,” said Assemblyman Cohen., who chairs the Assembly Financial Institutions and Insurance Committee. “What if you drop out of college to feed your family, or what if you can't afford to go to college because you have to work? Why should these people be punished? It's just a mechanism so that insurance companies can charge more money.”

Assemblyman Cohen said he has seen no studies from the company or the state's Department of Insurance and Banking to justify the use of such information in underwriting. However, he indicated he would be open to reconsidering his position based on the facts.

LeRoy A. Boison Jr., a consulting actuary for Pinnacle Actuarial Resources Inc. in Garden City, N.Y., noted that carriers are seeking to refine their classifications, looking at nontraditional rating elements such as occupation and education. But he pointed out that the classifications are part of multiple variables used in underwriting an individual risk.

“Carriers test as many variables as they can and refine it all as much as they can to get data,” said Mr. Boison. “Everyone is searching for a better mouse trap.”

John Rollins, an actuary with Citizens Property Insurance Corp. in Tallahassee, Fla., said he has never seen a system where education and occupation dominate the underwriting of a policy. Underwriting guidelines, he said, are too complex to allow one or two factors such as education or employment to dominate all risk factors.

“Rating classification is discriminatory,” said Mr. Boison. “The question is, is it fair discrimination?” he added, noting that the viability of the plan must be proven to the insurance department before it is implemented.

Earlier this month, GEICO responded to questions about its rating with an e-mail saying it evaluates over two dozen potential risk factors in underwriting applicants, and the factors were approved by the state's insurance department. The department noted that GEICO is not the only company using these factors, and said it has also seen data supporting the use of such data.

In his own letter to the NAIC, CFA Insurance Director J. Robert Hunter said the practice should be barred before it gets into general use. “If an insurer sees competitors doing this and believes the competitors will take away their richer clients, to whom they could sell home, life, boat insurance and banking products, the insurer may feel forced to adopt this approach,” he wrote. “We urge you to prohibit this practice before it becomes more widespread.”

Elizabeth Northrup, director of public affairs at the American Insurance Association, noted that New Jersey, where the issue seems hottest, has turned into a “really competitive marketplace over the last few years,” adding that while GEICO might be using these factors, other companies might not be. She urged consumers to “shop around.” (GEICO is not a member of AIA.)

Joseph Annotti, senior vice president of public affairs for PCI, added that insurers must 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 said. “Restriction of this type can force consumers to pay more for insurance.”

He added that “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.”