The denial of an insurance policy of a Florida Congresswoman has shined the spotlight on the use of an applicant’s future travel plan when insurers underwrite life insurance policies. Policymakers as well as regulators are debating the issue across the country. Former North Dakota Insurance Commissioner Jim Poolman examines this politically sensitive issue and the new Florida regulations that govern how an applicant’s plans of future travel can be used, and the requirements placed on insurers to be able to use the information.

Poolman recounts Congresswoman Wasserman-Schultz’s story and explains how the agent who took the Congresswoman’s application for a life insurance policy asked about possible future travel to any foreign country. Wasserman-Schultz responded that if she were to travel, she would very much like to go to Israel. According to the company, the policy was denied based on future foreign travel plans, in this case because of the instability in Israel.

Poolman explains how Wasserman-Schultz found a sympathetic ear in her home-state Insurance Commissioner Kevin McCarty who also saw this practice by life insurance companies as unfair discrimination. McCarty became a leading voice on the issue with national regulators and his home state legislators. He pursued enabling legislation by amending the Unfair Trade Practices Act in the Florida legislature Section 626.9541 (1) (dd), F.S. and has now implemented new regulation 69O-125.003, F.A.C that now governs the underwriting of life insurance policies for Florida citizens. These additional requirements on insurers were designed to protect those Floridians who travel lawfully, but will be considered by insurers doing business in Florida as unnecessary burdens.

The author writes: “The new regulation prohibits insurers from refusing to write coverage, limit the amount of coverage to an applicant, or determine the rates, based on the intent of the applicant to engage in “future lawful foreign travel or based upon past lawful foreign travel, unless the insurer can demonstrate the insureds who have traveled or intend to travel are a separate actuarially supportable class whose risk of loss is different from those insureds who have not traveled and do not intend to travel.” In addition, insurers are prohibited from using past lawful foreign travel as a “sole” determinant in underwriting a life insurance policy.”

Poolman addresses the “separate actuarially supportable class” language of the regulation and also discusses the regulation’s data collection and reporting requirements and penalties.

The author concludes: “The new Florida regulations will continue the debate between those who see regulating underwriting practices of insurers as unnecessary and those who see the use of lawful travel to foreign countries, especially those with religious distinctions as discriminatory practices by insurers. The fundamental questions that must be asked of insurers: Does travel to foreign countries pose a significant risk to mortality that can be quantified? Are certain countries riskier than others? Obviously those countries at war, or with significant military action taking place may have more risk, but is the risk only to those actively engaged in the military, and not to civilians who are visiting less dangerous parts of the country?”

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