Office Of Insurance Regulation Submits Report On Freedom To Travel Law
Tallahassee - (3/02/2007) Florida Insurance Commissioner Kevin McCarty today submitted a report to legislative leaders detailing how life and health insurers are complying with the new law regarding use of lawful past travel or future travel plans in insurance sales. The report to the President of the Florida Senate and the Speaker of the House of Representatives details instances under which life insurance was denied, continuance was refused, or coverage was limited based on lawful future travel plans; the number of insurers taking such action; and the reason for taking each such action.
The law, passed by the 2006 Legislature, says that an insurer may not refuse life insurance to; refuse to continue the life insurance of; or limit the amount, extent, or kind of life insurance coverage available to an individual based solely on the individual's past lawful foreign travel experiences or future travel plans.
In the spring of 2005, U.S. Representative Debbie Wasserman Schultz was denied life insurance coverage by American General, an AIG company, for the sole reason that she indicated she might travel to Israel at some point in the future. Subsequently she notified Commissioner McCarty of the refusal to sell her coverage based on possible travel plans.
"I was appalled," said McCarty. "To deny coverage to people simply because they plan to engage in lawful international travel is patently unfair and wrong. I was glad that Gov. Bush and the Legislature agreed, and we were able to shine a light on these practices and bring them under control."
"Companies should price for risk, however, we should not allow companies to simply deny Americans life insurance based solely upon possible travel," said Rep. Wasserman Schultz. "The unrestrained lawful travel of American citizens is in the national interest of the United States and our allies abroad."
The report shows that of the 516 life and health insurance companies licensed in Florida, 127 have been found to include travel-related questions in their applications and/or underwriting materials. So far 15 instances have been identified where lawful travel-related questions have been used as a reason for refusal.
On-site examinations are currently in progress to review approximately 8,500 relevant policies to determine if coverage was denied, refused or limited due to past lawful travel or future travel plans. McCarty said he will be reviewing each instance where a violation of the new law has been identified to determine if fines or penalties are warranted. The 2007 Report on Life Insurance Limitations on Freedom to Travel can be found at http://www.floir.com/siteDocuments/FreedomtoTravelReport.pdf
and the appendices can be found at http://www.floir.com/pdf/Appendices1.pdf
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