Orlando, Fla. – The National Association of Insurance Commissioners (NAIC) is advancing a rule that will protect insurance consumers from discriminatory underwriting practices in the sale of life insurance.

At a recent conference, NAIC’s life insurance and annuities committee unanimously adopted revisions to the Unfair Trade Practices Model Act that would limit an insurer’s ability to refuse life insurance to a consumer due to lawful past travel or, under certain circumstances, lawful future travel.

Specifically, future travel cannot be the basis for a coverage decision unless travel to a specific destination at a specific time is found, based on sound actuarial principles and actual or anticipated experience, to create a risk of loss greater than that for individuals who do not travel to that place at that time.

Travel to a destination where the U.S. Centers for Disease Control and Prevention has issued an alert or warning, or where there is an ongoing, armed conflict involving a foreign army, is deemed a valid basis for refusing to offer or limiting coverage.

“When adopted, this proposal will protect Americans’ right to travel without losing important life insurance protection,” says New York State Insurance Superintendent Eric Dinallo, chair of the committee.

The issue gained awareness in 2005 when Rep. Debbie Wasserman Schultz (D-Fla.) was denied life insurance due solely to potential travel to Israel. The denial letter invited her to re-apply for life insurance upon her return. Florida Insurance Commissioner Kevin McCarty presented the issue to the NAIC, and it became part of the committee’s charges in 2006.

The proposed revisions now advance to Executive Committee and Plenary for final approval.

Source: National Association of Insurance Commissioners

Register or login for access to this item and much more

All Digital Insurance content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access