Panel OKs Bill on Travel Bias in Insurance

A bill that would make it illegal for life insurers to deny coverage to Californians who visit Israel, the Philippines and other countries on the federal government’s “Travel Warning” list passed a key legislative test Wednesday.

The proposal, closely modeled on a law passed in Washington state in May, would require insurers to sell policies in California based on actuarial data such as age and health. Blacklisting consumers who disclose that they have recently visited, or even plan to visit, countries named by the State Department as dangerous for American travelers would be prohibited under the bill, which passed the Assembly Insurance Committee on a 7-0 vote.

New York and Illinois have approved similar laws, and efforts are underway in Congress to pass a national version, known as the Life Insurance Anti-Discrimination in Travel Act.

“There are a lot of people in California who travel to the Philippines or Israel or other places who don’t realize they may be denied life insurance because of that,” said Atty. Gen. Bill Lockyer, a backer of the bill.

Of the 29 countries on the State Department list, most are well-known hot spots such as Afghanistan, Iraq and Colombia. The inclusion of Israel on the list appears to be a primary reason for the effort to pass the anti-blacklisting law.

Much of the testimony before the insurance committee Wednesday came from members of Jewish groups, who argued that penalizing visitors to Israel puts a burden on business travelers and religious tourists from three faiths: Judaism, Christianity and Islam.

“To deny life insurance based on past travel when the applicant has already come back safely makes no sense,” said Nancy Appel, associate director of the Anti-Defamation League’s Central Pacific Region in San Francisco.

Backers of the bill also testified that Israel has a lower death rate than the U.S., based on United Nations data.

Lockyer predicted that the bill would pass the Legislature and get a sympathetic reception from Gov. Arnold Schwarzenegger.

The governor has close ties with the Simon Wiesenthal Center in Los Angeles. The center, a Jewish museum and Holocaust documentation facility, organized Schwarzenegger’s visit to Israel in May of last year.

A Schwarzenegger spokesman said the governor hadn’t taken a position on the bill, which is being carried by Sen. Jackie Speier (D-Hillsborough).

The life insurance industry initially opposed Speier’s bill, but is now neutral, said Brad Wenger, president of the Assn. of California Life and Health Insurance Companies.

“We’ll follow the law, which requires sound actuarial principles,” he said.

In April 2004, Allen Estrin, a L.A. radio producer, sued 14 insurers after his application for a life insurance policy was turned down because of an Israel trip he had made two years earlier.

Allstate Life Insurance Co. settled in July 2004, agreeing to “not consider past or future travel to the state of Israel, the West Bank or the Gaza Strip in the underwriting process for its life insurance policies.” The legal stipulation, however, didn’t cover any of the other countries on the State Department list.

The 13 other defendants, including Banner Life Insurance Co. of Rockville, Md., which turned down Estrin, are still fighting the lawsuit, which would become moot if the Speier bill became law.

Estrin’s attorney, William M. Shernoff, said he was offended by the insurance companies’ automatic rejection of people who had traveled or planned to travel to Israel.

“Israel is a friendly country, a democracy,” Shernoff said. “So many Americans go over there; politicians go over there; our governor goes there. Why should all these people be automatic rejects for life insurance?”