Bill Eases Travel Destination As A Life Underwriting Criterion

Although insurers are state-regulated, she said she is promoting the provision because there should at least be a floor barring these industry practices, which she said her research has determined are widespread.

She said the industry has argued that some exceptions should be made to reflect the risks of traveling to war zones or where there is a strong health risk. "But we made sure these exclusions were tight enough so insurers couldn't use them to bar a large number of people," she said.

The travel exclusion for Israel, she said, was based on the State Department's warning list, but her research has found that someone is far more likely to die from a random event in the U.S. than in Israel.

Wasserman-Schultz won bipartisan support then for legislation she introduced in the House banning the practice after a unit of American International Group Inc., New York, turned down her application for a life insurance policy. She stated publicly at a hearing on the legislation that the insurer rejected the application because she said she might travel to Israel.

Her provision was included in the TRIA extension bill that the House approved in September 2005, but lawmakers dropped it from the final bill after the ACLI lobbied fiercely against it.

Sec. 11 of the extension legislation, H.R. 2671, is titled "Mandatory availability of life insurance that does not preclude future lawful travel."

The provision doesn't outright ban use of travel in underwriting, according to lawyers and industry lobbyists, but it does place restrictions on use of travel destination as an underwriting criterion.

The provision also contains language that would prohibit charging extra for insureds who intend to travel to certain destinations unless the rate is not excessive and is based on a good-faith actuarial analysis.

It prohibits denial of applications for coverage based on travel unless the travel destination meets certain criteria, such as agencies of the federal government ruling such travel dangerous because of an ongoing military conflict or health risks.

The provision says charging applicants extra for a life insurance policy or for renewal of a policy based on travel destination can be made only if the travel is planned to occur within one year of the time the policy goes into force or when renewed.

The provision does not pre-empt existing laws in 9 states dealing with the issue. These laws exist in Connecticut, Massachusetts, Florida, Illinois, California, Washington, Colorado, Maryland and New York.

A spokesman for Wasserman-Schultz said the provision is aimed at establishing a "floor" on the issue, giving states the latitude to impose more stringent rules.

Additionally, enforcement provisions remain to be negotiated, say congressional staffers and industry officials.