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54 S.M.U. L. Rev. 1953 (2001)
Insurance Weblining and Unfair Discrimination in Cyberspace

handle is hein.journals/smulr54 and id is 1971 raw text is: INSURANCE WEBLINING AND UNFAIR
Gary A. Hernandez*
Katherine J. Eddy**
Joel Muchmore***
HE purpose of insurance underwriting is to use data about a risk
to evaluate that risk. Specifically, factual information is used to
determine whether the risk is appropriate for a company and to
determine the appropriate price of the insurance for that risk. This deter-
mination is, by its very nature discrimination, but it is a valid and ap-
propriate means of underwriting. However, certain data is deemed
unfairly discriminatory, and its use is outlawed. Redlining is charging
higher rates or declining to write insurance for people who live in particu-
lar areas (figuratively, sometimes literally enclosed with red lines on a
The emergence of the Internet has brought with it a new set of ques-
tions and concerns for the insurance industry regarding redlining. Some
commentators believe the opportunity to purchase insurance online will
usher in a new era of equality through increased access and elimination of
the need for face to face encounters. Others fear that selling policies on-
line presents insurance companies with new opportunities for discrimina-
tion, thus breathing new life into the specter of redlining.
Weblining is the use of the World Wide Web to practice any form of
redlining. As relevant to insurance providers, most discussions of insur-
ance weblining address either access to the Internet or profiling potential
customers. As an access issue, there is concern that underprivileged con-
sumers who lack access to the Internet are intentionally excluded from
the benefits of online rebates. Electronic Redlining addresses the re-
lated concern that telecommunications companies bypass disadvantaged
* Gary A. Hernandez is a partner in the San Francisco office of Sonnenschein Nath
and Rosenthal. He is co-author of the Treatise eBusiness and Insurance (CCH Publishing
2001). Prior to entering private practice, Mr. Hernandez was Deputy Insurance Commis-
sioner and Chief of Enforcement at the California Department of Insurance.
** Katherine J. Eddy is an associate in the San Francisco office of Sonnenschein Nath
and Rosenthal.
*** Joel Muchmore is a student at Hastings College of Law and was a summer associ-
ate at Sonnenschein in 2001.
1. NAACP v. Am. Family Mut. Ins. Co., 978 F.2d 287, 290 (7th Cir. 1992), cert. de-
nied, 508 U.S. 907 (1993).


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