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Travel Underwriting Challenged In California

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Fourteen life insurance companies face a lawsuit in California for allegedly denying life insurance coverage to people who travel to Israel.

The 14 companies are accused of engaging in unfair and discriminatory business practices in violation of the California Business and Professions Code by their underwriting practices.

The lawsuit asks a California state court to issue an injunction that would prohibit life insurers in California from discriminating against applicants based on travel to Israel.

The plaintiff, Allen Estrin, claims his application for life insurance was rejected due to his past and planned future travel to Israel.

According to the complaint, many California citizens, including those of the Jewish and Christian faith, visit Israel as tourists or pilgrims to holy sites. Businessmen and politicians also frequently visit Israel, the complaint says.

“California citizens, who apply for life insurance, should not be denied life insurance policies based upon their lawful travel to Israel as tourists, participants in holiday pilgrimages or otherwise,” the complaint says.

Lisa Stern, an attorney representing Estrin, says in a statement: “The denial of life insurance to persons who have traveled or plan to travel to Israel is crippling tourism and commerce, tearing families apart and punishing the only friendly democracy in the Middle East.”

Jack Dolan, a spokesman for the Washington-based American Council of Life Insurers, says travel is a legitimate factor used by life insurers in the underwriting process and represents one factor among many that companies may use.

He says this is not about travel to any one country but about travel to regions of the world where significant health and security concerns exist. Life insurers, Dolan adds, are not arbitrary in the use of travel in underwriting.

The 14 companies cited in the complaint are Banner Life, Pacific Life, Firemans Fund, Transamerica Occidental Life, Manufacturers Life, John Hancock Variable Life, Jefferson-Pilot, New York Life, Northwestern Mutual, Prudential, State Farm, Allstate, Hartford and Travelers.

Rep. Rahm Emmanuel, D-Ill., has introduced legislation, H.R. 3927, the Life Insurance Anti-Discrimination in Travel Act, in the House that would bar life insurers from denying coverage to people who travel lawfully to countries such as Israel and Turkey. (See NU, March 22, 2004.)

Reproduced from National Underwriter Edition, May 7, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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