Following the recent trend set by states such as California, Florida and New Jersey, the National Association of Insurance Commissioners (“NAIC”) has adopted a revised version of the Unfair Trade Practices Model Act (the “Act”) that limits the circumstances in which a life insurer can deny coverage to an individual based on the individual’s lawful past and future travel. Insurers are increasingly denying coverage or increasing premiums for individuals traveling to countries that insurers consider dangerous, such as Israel.
The Act now specifies that lawful future travel “cannot be the basis for a coverage decision unless travel to a specific destination at a specific time is found, based on sound actuarial principles and actual or anticipated experience, to create a risk of loss greater than that for individuals who do not travel to that place at that time.” The Act also carves out certain travel to locations involved in armed conflicts or locations for which the U.S. Centers for Disease Control and Prevention has issued alerts or warnings. It is now left up to the remaining state legislatures to decide whether or not they want to adopt the revised Act.
