The working group showed a taped message of Rep. Debbie Wasserman Schultz chastising the practice of travel underwriting. Schultz commented on her experience with being denied coverage from a unit of American International Group Inc. (AIG) because of her travel plans for Congress to Poland and possibly Israel. She went on to cite 2004 statistics “indicating that none of the 350,000 Americans who traveled to Israel that year had died in Israel.”
Florida lawmakers and regulators have “developed model regulation that would prohibit travel underwriting that has no actuarial basis.” However, Arnold Dicke, an actuary representing the American Academy of Actuaries, “believes spending long periods in a high-risk region of the world increases likelihood that there could be a claim.” The following comment was the most interesting to me when Dicke was asked by North Dakota Insurance Commissioner Jim Poolman “if companies looked for actual travel underwriting experience data”:
Experience could be based either on actual data or on anticipated data, if data collection was insufficient because a particular region was in upheaval.
How does one conjure up “anticipated data”? Is this data based on figments of the imagination or something more solid like a hunch? I hope most insurers are not using any “anticipated data” for the underwriting process.
Other comments included:
- Insurers should make it clear why they are using information about travel to a particular country in underwriting.
- Travel underwriting is not justified actuarially, is contrary to public policy and has not been proven to have an effect on insurers’ solvency.
If insurers are going to use future travel as part of the underwriting process they need to be very specific in the questions they ask the applicant. Where are you traveling, what part of the country, what will you be doing and how long will you be there? Just because someone is travelling to Iraq or Israel doesn't mean they will be in danger.
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