The firm told a regulatory group that any revisions to policy requirements should be based on traditional underwriting
An insurer in the US has argued that “sex” rather than “gender” should be specified as part of the information about the insured that should be included in a life insurance policy overview.
“‘Gender’ is a fluid concept while ‘Sex’ refers to genetic sex at birth,” Pacific Life Insurance company said in a comment letter sent to an arm of the National Association of Insurance Commissioners (NAIC), reported ThinkAdvisor.
The comment letter was sent in response to a public consultation opened by the NAIC’s Life Insurance Illustration Issues Working Group. In particular, the group is reviewing the regulations surrounding “models,” which define what state insurance laws or regulations should look like in the US. A group of state insurance watchdogs, the NAIC develops such models to help states share legal and policymaking expertise, as well as help make their insurance rules more uniform.
“The Life Insurance Illustration Issues Working Group is exploring the idea of improving the narrative policy summary required by a section of the NAIC’s existing Life Insurance Illustrations Model Regulation,” ThinkAdvisor said. The group is also reportedly reviewing the policy overview required in the NAIC’s Life Insurance Disclosure Model Regulation.
Commenting on the regulation for disclosure models, Pacific Life said a proposed update that includes “gender of the insured or insureds” in the description of “information about the insured” that should be included in a life insurance policy overview is inappropriate.
“Using ‘Sex’ enables insurers to apply traditional underwriting practices that are based on the insured’s or proposed insured’s genetic sex at birth,” the company said.
It also commented on the proposed inclusion of the “date of birth of insured or insureds” in the policy overview. “Personally identifying information not necessary to the provision of a policy overview should be deleted from the proposed model revision,” it said.
One other point the company commented on involves requiring that policy overviews include the insured’s risk class, along with a statement as to where the insured can find additional information regarding risk classes.
According to Pacific Life, the overview should include only the policyholder’s risk class. Since each life insurer has a different risk class structure, additional details about risk class would be available only in the insurer’s underwriting manual, which limits the usefulness of detailed risk class information as a consumer comparison tool.
“For policy overview purposes, a simple provision of ‘risk class’ will indicate basic class distinctions which might be useful to a consumer, e.g., smoker versus non-smoker,” Pacific Life suggested.
