COVID 19 and Life Insurance Underwriting-Dr. Joseph Belth
No. 409: COVID-19 and Life Insurance Underwriting
Posted: 10 Feb 2021 10:00 PM PST
The Consumer Federation of America (CFA) recently announced it had written to the National Association of Insurance Commissioners (NAIC) about COVID-19 and the underwriting of life insurance. The CFA sent copies of the letter to chief executives of several large life insurance companies based in the United States. The letter grew out of developments reportedly occurring in Europe. A week later, I asked the CFA whether it had received any replies. The CFA said no replies have been received as yet.
The CFA Announcement
The CFA announcement, dated January 29, 2021, is entitled “Recovered COVID-19 Patients Facing New Life Insurance Hurdles in Europe, Protections Needed for American Consumers.” Here are the first, third, and fifth paragraphs of the announcement:
CFA sent a letter to the NAIC urging them to adopt a model rule for life insurance underwriters that might want to delay or deny coverage to people who had COVID-19 and recovered or had symptoms but no diagnosis. The letter is in response to recent reporting that some life insurers in Europe are already taking steps to delay or deny people life insurance coverage based on having contracted COVID-19 or suspected of it. Over 25.4 million Americans have already tested positive for the virus, according to The New York Times.
In Europe, some underwriters are imposing waiting periods before COVID-19 patients, even those who have recovered, can apply for coverage. Further, some insurers are limiting coverage for certain age groups as part of their response to the pandemic. Still others are postponing applications for anyone who had COVID-19 or lived with someone who got the disease.
CFA also sent the letter to the CEOs of the leading life insurance companies in America and their trade organization [American Council of Life Insurers, or ACLI] asking them to consider voluntary action to use transparent and reasonable underwriting rules relating to COVID.
My Letters
I will write soon by regular mail to the NAIC, the ACLI, the CEOs of a few of the life insurance companies to which the CFA wrote, and a few other CEOs. I will ask for their comments on the subject. I plan to post a follow-up report on the responses to my letters.
General Observations
I think this is a very important subject. Instead of offering a complimentary package of relevant material, as I normally do, I am providing here a link to the CFA letter to the NAIC.