U.S. Rep. Seeks to Halt Denial of Insurance Due to Travel Plans

By | July 25, 2005

U.S. Rep. Debbie Wasserman Schultz, D-Fla., was outraged when she applied for additional life insurance and was denied because she might travel to Israel at some unspecified point. So now she’s planning to file a bill to prevent the practice.

Even though Wasserman Schultz didn’t have a plane ticket, reservations or even travel dates in mind, she was told in a letter from American International Group, Inc., that they wouldn’t insure her because she’s thinking about going to the country.

“I would not have believed it if it didn’t happen to me personally,” Wasserman Schultz said.

The letter she received in March said, “We will be able to reconsider this decision once you have returned from Israel and there are no future plans to travel to any countries of concern.”

Wasserman Schultz plans to file a bill this week and is seeking support from Florida Sens. Bill Nelson and Mel Martinez. It would make it illegal to deny, cancel or charge higher insurance rates based on a person’s legal foreign travel plans.

“Some companies will insure you, some companies won’t, some companies will charge you a higher premium,” she said. “I’ve heard numerous stories by now of the same problem happening to other people.

“We’re talking about a country that’s a democracy, that’s one of our closest allies, that we can legally travel to and in fact has a lower intentional death rate than we do in America.”

She said 11 out of every 100,000 people in Israel are murdered or killed in an act of terrorism each year compared to 17 out of 100,000 in the United States, based on 2002 statistics.

AIG said the policy on travel is standard in the industry.

“For American General, the guideline on any life insurance quote or denial related to where somebody travels is pegged to information that we get from a company that reinsures our life insurance policies,” said Chris Winans, a company spokesman. “It is their guideline that governs our policy.”

The Washington-based American Council on Life Insurers wouldn’t comment on individual companies’ policies, but recommended that if someone should just try another company if they are denied life insurance over travel plans.

“We do know that there are many companies that do not ask questions about travel, so we know that it is widely available,” said council spokesman Jack Dolan.

The practice is also legal, said Bob Lotane, a spokesman for the Florida Department of Financial Services, which oversees insurance regulation.

“We’re not fans of the practice. However, under Florida statute, there’s really nothing we can do to prevent it,” Lotane said.

The state does limit companies, though, by requiring that they specifically ask about travel over the subsequent two years instead of simply asking about travel at any point in the future, he said.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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