Washington, D.C. — Consumer Federation of America (CFA) sent a letter to the National Association of Insurance Commissioners (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.

“People who had COVID-19 and recovered who need life insurance coverage to protect their families should be able to get it under clear underwriting rules publicly available for them to review,” said J. Robert Hunter, CFA’s Director of Insurance and former Texas Insurance Commissioner. “We understand reasonable precautions are needed, but to harm COVID patients and their families again is unacceptable. State regulators need to step in and issue a rule to protect consumers from arbitrary insurance company practices. Transparency and reasonableness in underwriting must be the standard.”

In Europe, some life 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.

In order to guard against the use of arbitrary or unfair underwriting rules in the United States, the NAIC should adopt a model rule for life insurance companies. The rule should 1) require underwriting rules relating to COVID be made public before they are used and 2) establish reasonable standards as to what would trigger a delay or denial of coverage.

CFA also sent the letter to the CEOs of the leading life insurance companies in America and their trade organization asking them to consider voluntary action to use transparent and reasonable underwriting rules related to COVID.

“Millions of consumers have had COVID-19, and without a model rule many of them could be unreasonably denied coverage,” said James Hunt, a life insurance actuary and former Vermont Insurance Commissioner. “NAIC has an opportunity to get ahead of this issue and make sure Americans who suffered with COVID are treated appropriately.  Insurers have the opportunity to take voluntary action to assure the nation that their underwriting of COVID related risks will be reasonable and transparent.”

Contacts: J. Robert Hunter, 703-528-0062