Many life insurers appear to have been asking Florida applicants questions about travel plans, officials say.
Florida lawmakers passed a law in 2006 that prohibits life, health and disability insurers from basing underwriting decisions on an applicant’s past travel or future travel plans, unless the insurers have supplied evidence that questions about travel are actuarially justified.
The Florida Office of Insurance Regulation recently conducted a survey and an examination to find out how common travel underwriting really has been.
When regulators asked life insurers, 127 of the 516 companies with active certificates of authority said they have included travel-related questions in their application materials or underwriting guidelines, and 7 companies reported 15 instances of decisions to refuse coverage or deny extension of coverage based on travel-related questions, officials write in a report on the work.
The regulators used “company knowledge” to select 11 companies for further review.
Regulators have looked at 3,346 policies at 3 companies, and they have found 8 travel-related coverage refusals, denials or limits, officials report.
Adverse travel-related decisions have affected about 0.24% of the applications subjected to close scrutiny.
“While unlawful discrimination is a serious concern, the evidence to date does not suggest that it is a pervasive problem across the industry in Florida,” officials conclude.
Officials note that 33 insurers have requested and received permission to ask actuarially justified travel-related questions.
The Florida report includes a brief review of the attention that travel underwriting is getting outside Florida.
The National Association of Insurance Commissioners, Kansas City, Mo., is developing a revision to its Unfair Trade Practices Model Act to identify discrimination in life insurance underwriting based on travel, without actuarial justification, as an unfair trade practice, officials write.
California, Connecticut, Illinois, Maryland, Massachusetts and New York are some of the other states that already have enacted laws restricting travel underwriting, officials write.
Kicker: The Results
Florida Travel Underwriting Findings
o 127 of 516 active life and health insurers have included travel-related questions in their application materials and/or underwriting guidelines.
o 7 of the 127 companies attested to 15 instances in which the company had refused or denied extension of coverage based on responses to these questions.
o At 3 companies chosen for an in-depth review, 8 of 3,346 policies reviewed were associated with use of actual travel or future travel plans as a reason to refuse, deny, or limit life, health or disability coverage.