Use of travel destination as an underwriting criterion for life insurance would be severely restricted under a provision of legislation extending the Terrorism Risk Insurance Act introduced in the House last week (see story above).
Lobbyists for the American Council of Life Insurers and member companies participated in the lengthy talks that resulted in the compromise provision, and the ACLI issued a statement voicing support for it.
That means that the provision has a good chance of being included in the final bill extending TRIA, which expires Dec. 31, even though the Bush administration and some senators may seek major changes in other provisions of the expansive House version of the bill.
The provision was termed “groundbreaking” by a lawyer/lobbyist for a life insurer, who conceded that the industry is supporting this compromise because it is the price the industry would have to pay for having group life insurance included in TRIA for the first time since the program was launched in November 2002.
The provision is a victory for Rep. Debbie Wasserman-Schultz, D-Fla., who has been pushing for an outright ban on use of travel destination since she introduced such legislation in 2005.
According to several industry lobbyists and lawyers, Rep. Barney Frank, D-Mass, chairman of the House Financial Services Committee, stepped in to help broker a compromise after talks between industry officials and Wasserman-Schultz broke down about 2 weeks ago.
This was alluded to in a statement from ACLI president and CEO Frank Keating supporting the provision issued last week.
“This has been a contentious subject in the states and Congress over the past 2 years,” Keating said. “We’re pleased with Chairman Frank’s leadership in finding a middle ground on this issue.”
Most importantly, Keating added, “the provision preserves our member companies’ ability to consider certain risks associated with travel outside of the United States as part of their underwriting.”
Wasserman-Schultz said she is hopeful that she has enough support to ensure that the provision survives the rest of the legislative process.
She said she is working with Sen. Charles Schumer, D-N.Y., who wants to introduce the provision as a free-standing bill in the Senate relatively soon. Schumer is also a member of the Senate Banking Committee, which will be the first panel to consider the TRIA bill in the Senate.
Wasserman-Shultz also noted the strong support of Frank.
“My argument has always been that if you allow headlines to dictate American business practices, then the terrorists win,” Wasserman-Schultz said. “That is why the TRIA bill is an appropriate place to put this.”