Regulators and consumer advocates clashed here with actuaries and insurance group representatives over whether and how life insurance underwriters should use information about applicants’ travel plans.
The Foreign Countries Working Group, an arm of the Life Insurance and Annuities Committee at the National Association of Insurance Commissioners, Kansas City, Mo., held a hearing on the topic here during the NAIC’s fall meeting.
The working group started the hearing by showing a taped message from Rep. Debbie Wasserman Schultz, D-Fla., who called travel underwriting a “despicable practice.”
“Freedom to travel is fundamental to Americans,” Wasserman Schultz said.
Wasserman Schultz talked about her own unsuccessful efforts to get additional life insurance coverage from a unit of American International Group Inc., New York.
Wasserman Schultz said she would be traveling to Poland for Congress and might travel to Israel. The AIG unit, American General, Houston, turned down the lawmaker’s application for coverage March 25.
Wasserman Schultz argued that there was no apparent reason for travel underwriting.
She cited 2004 statistics indicating that none of the 350,000 Americans who traveled to Israel that year had died in Israel.
Wasserman Schultz urged state insurance regulators at the NAIC to follow the lead of Florida lawmakers and regulators and develop model regulation that would prohibit travel underwriting that has no actuarial basis.
Arnold Dicke, an actuary representing the American Academy of Actuaries, Washington, said he believes spending long periods in a high-risk region of the world increases the likelihood that there could be a claim.