LIFT: Americans One Step Closer to Travel Fairness Key provisions of Wasserman Schultz’s “Life Insurance Fairness for Travelers Act” Adopted by the House Financial Services Committee
(Washington, DC) — The Life Insurance Fairness for Travelers Act (“LIFT,” H.R. 3639) reached a major milestone yesterday as key provisions of the legislation were included in the Terrorism Risk Insurance Revision Act of 2005 (“TRIA,” H.R. 4314), which passed out of the House Financial Services Committee by a 64-3 vote. The acceptance of these provisions moves LIFT forward as TRIA advances toward final passage in the House of Representatives.
“This is a big step forward for Americans who want to travel freely,” said Rep. Wasserman Schultz. “It sends a message to the world that American citizens and businesses will not allow Osama Bin Laden and the rest of the world’s terrorists to dictate where we travel. I am certainly hopeful that other Members of Congress and the President will recognize the value of renewing the Terrorism Risk Insurance Act and maintain the inclusion of the Life Insurance Fairness for Travelers Act language in this legislation.”
The provisions from the Life Insurance Fairness for Travelers Act included in TRIA protect travelers from being denied life insurance, simply because they may plan international travel.
Currently, life insurance companies can deny coverage to people based solely upon plans for legal travel to different international destinations. Some of these countries, such as Israel and the Republic of Kenya, have low intentional death rates which are even lower than that of the United States (Israel’s intentional death rate is 11 per 100,000 compared to the United States’ rate of 17 per 100,000).
“Companies should be allowed to price for risk, however, we should not allow companies to simply deny Americans life insurance based solely upon possible travel,” said Rep. Wasserman Schultz. “After all, they sell policies to skydivers and smokers.”
The Terrorism Risk Insurance Revision Act provides a federal “backstop” for insurers, in case of a terrorist event. Essentially, it protects insurers from bankruptcy in case of catastrophic losses. The amendment that passed yesterday in the House Financial Services Committee requires that any insurer benefiting from TRIA, which also offers life insurance, must offer coverage that does not preclude future lawful foreign travel. The language allows for risk-based pricing by the insurer, but it stipulates that premiums for such coverage must not be excessive and must be based on a good faith actuarial analysis.
The language is inserted in the “Mandatory Availability” section of the bill. See below. (Page 24, after line 19 of H.R. 4314)
” (c) MANDATORY AVAILABILITY.-Each entity that meets the definition of an insurer under section 102-
[inserted after paragraph (2)],
“(3) shall make available, in any life insurance policy, coverage that does not preclude future lawful foreign travel by the person insured, and shall not charge a premium for such coverage that is excessive and not based on a good faith actuarial analysis.”