The Office of General Counsel issued the following opinion on May 25, 2005, representing the position of the New York State Insurance Department.
Re: Life Insurance Underwriting
1. Is New York Insurance Law § 2614, as added by 2004 N.Y. Laws 297 and effective October 2, 2004, extraterritorial?
2. Is the underwriting procedure that the inquirers company utilizes, using the current life insurance application originally approved for ABC Life Insurance Company of New York, in compliance with New York Insurance Law § 2614?
1. New York Insurance Law § 2614 only affects insurance policies issued or issued for delivery in New York.
2. The life insurance application as described in the inquirer's February 3, 2005 inquiry, which was originally approved for ABC Life Insurance Company of New York prior to its 2002 merger into DEF Life Insurance Company of New York, both companies being part of the AMIG Group, and the inquirers underwriting procedure are in compliance with New York Insurance Law § 2614.
The application in question contains a question about future travel. When the inquirer's company becomes aware, either from a prior insurance application to it or through a third party source, that the applicant has traveled outside the United States, the inquirer contacts the applicant and verify that the representation as to future travel is accurate. The inquirer asks whether such a procedure is in compliance with New York Insurance Law § 2614.
New York Insurance Law § 2614 provides:
No insurer or entity authorized to offer the kinds of insurance specified in paragraph one, two or three of subsection (a) of section one thousand one hundred thirteen of this chapter, nor any agent, officer or employee of such insurer or entity shall make any distinction or otherwise discriminate between persons, reject an applicant, cancel a policy or demand or require a higher rate of premium for reasons associated with an applicant's or insured's past lawful travel experiences.
There is no indication in either the text of New York Insurance Law § 2614 or the Memorandum in Support that it was intended to affect applications for life insurance, annuities or health insurance by individuals who were not resident in New York or where the policy was not intended for issuance in New York. Accordingly, the statute is not extraterritorial.
The justification for New York Insurance Law § 2614 was set forth in the Memorandum in Support:
Recent reports have indicated that individuals with past travel experience have been denied access to life insurance. There is no risk associated with past travel experience and such information should not be used when determining eligibility for a life insurance policy. This bill would ensure that life insurance companies base their underwriting standards on reasonable insurance risk instead of unfairly discriminating against individuals who have traveled in the past.
Prior to the enactment of New York Insurance Law § 2614, insurers did ask questions on current applications about past travel and made underwriting decisions based upon such responses. Insurers are cautioned that, while applicants may be asked to confirm their future travel plans, there may be no follow-up questions concerning the applicant's past travel.
Accordingly, since an insurer may, with respect to policies of individual life insurance, validly ask about future travel plans and require applicants to confirm representations about such future travel plans, the inquirer's company's underwriting practices are not in violation of New York Insurance Law § 2614.
For further information please contact Principal Attorney Alan Rachlin at the New York City office.