Mr. Snyder said evidence of a thriving insurance market in urban areas belies any claim of redlining or discrimination against certain neighborhoods. “With fewer than 2 percent of auto insurance in residual markets–the largest line of insurance coverage–we call upon the NAIC to reject demands for more controls over risk classification, so that recent progress can continue to be made on serving customers in all areas, including urban markets,” he said.

Don Cleasby, vice president of the Property Casualty Insurers Association of America, said the common flaw of consumer group studies is they do not take loss costs into account.

“After analyzing decades of loss experience, insurance companies have determined that the geographical location of where the vehicle is garaged and where the dwelling is located is one of the most predictive variables in determining insured loss expectancy,” he said.

Mr. Birnbaum urged the panel to evaluate the impact of new risk classifications, and recommend solutions to any identified problems in personal lines availability, affordability and fairness.

“We also think the regulators should identify potential problems with risk classifications that involve unfair discrimination and insurance availability and affordability issues,” he said.

North Dakota Commissioner Jim Poolman said the group will evaluate the testimony over the next few weeks to see what actions might be taken in 2007.

Meanwhile, the NAIC took no action here to move ahead with rate deregulation for personal lines. At a meeting of the Personal Lines Regulatory Framework Working Group, regulators could not agree on model regulation and legislation that would grant more rate freedom for insurers.

The regulators will continue over the next few weeks to try to reach a consensus on what rate regulation package could pass.

AIA's Mr. Snyder called the work of the panel this year a “missed opportunity.”

“What began as an NAIC initiative to update personal lines rate and form regulation by injecting competition into the system, has deteriorated into a rhetorical defense of the most intrusive and anticompetitive forms of regulation now being practiced in some states,” he said.

In 1999, following passage of the federal Gramm-Leach-Bliley Financial Modernization Act, the NAIC appeared open to exploring the issue of personal lines rate deregulation after approving a variation of it for commercial underwriters.

But following the Sept. 11, 2001 terrorist attacks and the subsequent sharp spike in rates, enthusiasm for deregulation seemed to dampen. Some states have introduced “flex rating” systems that allow insurance rate changes within certain percentages as a sort of introduction to rate freedom.

Meanwhile, the National Conference of Insurance Legislators has approved a model statute for personal lines rate deregulation and a flex rating measure as an alternative.