The National Association of Insurance Commissioners has unveiled draft model changes that could impose fines on life insurers that violate travel underwriting rules.

Regulators working at the NAIC, Kansas City, Mo., have incorporated the travel underwriting fine provision in draft amendments to the Unfair Trade Practices Act model.

Travel underwriting is the practice of refusing to cover an applicant or charging an applicant unusually high rates because of the applicant’s travel plans.

The issue became a major issue in 2006 after an insurer turned down a request by Rep. Debbie Wassermman Schultz, D-Fla., for life insurance because she said might travel to Israel.

The NAIC’s Life Insurance and Annuities Committee discussed travel underwriting during a December 2006 conference call and may look at the issue again during a a call later this month, officials say.

The new draft changes reflect comments made during the December 2006 conference call.

One provision would insert an amendment under the category of “unfair discrimination.” If unfair discrimination were found, the party committing the wrong would receive a copy of the findings in a cease and desist order, according to the model amendments draft.

A second provision would allow a commissioner to order a penalty of up to $10,000 for each travel underwriting violation. If travel underwriting violations were deliberate, a commissioner could order a penalty of up to $50,000 per violation, according to the draft.