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Congressional Legislation Would Bar Firms from Penalizing Israel Travelers

August 1, 2005
See Original Daily Bulletin From This Date

If Rep. Debbie Wasserman Schultz hadn’t been denied life insurance because of her plans to travel to Israel, she wouldn’t have believed it was possible insurance companies worked this way. But now the Florida Democrat is working to make sure this stops being a problem for Americans who visit Israel.

On July 28, the first-year lawmaker introduced legislation with bipartisan support that would forbid insurance companies from denying policies based on legal foreign travel.

Currently, several major insurance companies routinely deny policies if applicants say they plan to travel to Israel, Kenya, Colombia or other countries deemed to be at risk of terror attacks.

“This is a blacklisting of American citizens who choose to go to specific countries because of their ethnic backgrounds,” said Rep. Joseph Crowley (D-N.Y.), a co-sponsor of the Life Insurance Fairness for Travelers Act.

The legislation is similar to a bill, proposed last year and reintroduced July 28 by Rep. Rahm Emanuel (D-Ill.), that would prevent policy rejection based on past travel to high-risk countries.

The bills have been welcomed by numerous American Jewish groups. The two laws, taken together, could help numerous American Jews receive life insurance, and prevent insurance companies from charging excessive fees to travelers.

Wasserman Schultz received a letter in March from American General Life Insurance Company, a subsidiary of AIG, informing her that her application for additional life insurance had been denied.

The application she completed for the insurance asked if she was planning foreign travel. She marked yes, having recently been elected to Congress.

On her way to Poland, she received a call from her husband, saying the company wanted to know which countries she was planning to visit. Although she had made no reservations yet, Wasserman Schultz said she would be going to Israel because she assumed she would travel there in a delegation of lawmakers within the next year.

“I know misrepresenting a fact on one of these forms is fraud,” she said.

Joe Norton, a spokesman for AIG, said reinsurers, which provide insurance to insurance companies, require that travelers to Israel and several other countries be denied insurance.

“We’re fully aware of the problem,” Norton said. “We’re looking for a solution and looking for answers.”

Wasserman Schultz’s bill would make it illegal to deny any person life insurance or discriminate in coverage based on legal foreign travel. Insurance companies would also be barred from charging excessive or unfair rates to international travelers.

The Life Insurance Anti-Discrimination in Travel Act, which Emanuel introduced the same day, would prohibit companies from using previous lawful travel experiences as a basis for denying coverage.

Wasserman Schultz, who is a co-sponsor of Emanuel’s legislation, said the two bills were being introduced separately because they address separate issues, and to increase the chances one will pass.

But lawmakers acknowledge both are needed in tandem. Rep. Steve Israel (D-N.Y.) said he is planning a trip to Israel next month, and could be denied life insurance now because of his future travel.

“There has got to be a better standard,” Wasserman Schultz said.

Several states have already passed similar legislation. Some state laws prevent policy denials based solely on previous travels, while others focus on both previous and future travel.

Lawmakers did not specifically call the insurance companies’ policies anti-Semitic, but they did suggest it is an unfair practice.

They noted that numerous cities in the United States, and elsewhere around the world, are statistically more dangerous than cities in Israel.

Crowley, who is of Irish decent, said no one in his family was ever denied life insurance for potential travel to Northern Ireland, even at the height of the struggle between Catholics and Protestants.

The legislation will likely face strong opposition from the insurance industry. But Rep. Spencer Bachus (R-Ala.), a co-sponsor of the bill and key member of the House Financial Services Committee, said the legislation came at an important moment. Insurance and reinsurance companies are expected to lobby for renewal of the Terrorist Risk Insurance Act, which provides government reimbursement to insurance companies for catastrophic losses from acts of terrorism.

He said if the companies want something from Congress, they will be asked to back these bills.

Wasserman Schultz said the industry’s current policy could leave many Jews without protection.

“What’s going to happen is it’s either going to cause people not to travel to these countries, or not insure themselves and risk the results of what might happen,” she said.

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