Industry Battling Legislation That Bans Travel Risk Underwriting

The NAIC has proposed a draft resolution outlining what issues state policymakers should use in drafting a position on the issue, but the Center for Economic Justice argues that approach is inadequate.

It suggests that the state commissioners should instead disclose what they know about the practice in question. "Regulators should be publishing information about how many insurers utilize this underwriting guideline, how many consumers are affected and what sort of actuarial support regulators have found for this underwriting guideline in their–the regulators'–efforts to ensure that the practice is based on sound actuarial principles," the CEJ says in a comment letter to the Task Force in September.

Regarding the proposed federal legislation, Kimberly Olson Dorgan, senior vice president, federal relations, at the American Council of Life Insurers, said the industry does have objections to the Wasserman Schultz bill. "One concern is the enforcement provisions in the bill," she said, noting that the enforcement process included in the bill is "difficult to follow and administer."

Moreover, Dorgan said, "Our companies would not want to be forced to take on a certain risk. Life insurance is available and there are companies that would be willing to take on certain risks that others may not. Each company has their own criteria for assessing risk.

"Our concern is that this would impose a broad-based requirement that could affect a company's ability to underwrite properly," she said. "Basically the bill would deny our ability to turn down a customer if that customer is going to a dangerous place."

"Basically the bill would deny our ability to turn down a customer if that customer is going to a dangerous place," says ACLI's Kimberly Olson Dorgan.