A New York and New Jersey Lawyer Who Represents Policyholders and Beneficiaries in Life Insurance Denial Cases

An interesting article by Ted Siefer appeared in the Boston Globe about The Savings Bank Life Insurance company and how it has been required by Massachusetts state law to assess gender neutral premiums for life insurance policies–but this may be changing if the governor signs into law a bill recently passed by the legislature.

The issue of pricing life insurance based on sex raises fundamental questions of fairness and equality.

As the article discusses (and it’s a really good article), SBLI was created by an act of the Massachusetts legislature, and so it must ask state lawmakers for permission to adjust its business practices. As a result of both legislative and judicial developments, a situation was created where private life insurance companies in the state, but not SBLI, can set different rates for men and women. SBLI has expanded outside of Massachusetts and has a growing presence nationally. Not surprisingly, seeing that the restriction is imposed on all of its life insurance sales, no matter in what state they occur, it writes comparatively fewer policies for women than men. 

In 2008 there was a vote by the legislature to strike the unisex pricing restriction which was vetoed by Governor Patrick. Now, the legislature has again voted to strike the restriction, this time by a wider margin. The governor has yet to act on it.

This proposal raises important issues concerning discrimination in life insurance. There are actuarial differences between people of different genders, races, and ethnicities. Allowing SBLI to price life insurance policies differently based on sex conceivably opens the door to discrimination in the issuance of life insurance policies on a wider scale.  That logic was the basis for the veto in 2008, with the governor stating that the state-chartered company should be a model of non-discrimination and fairness.

Further, if sex can be considered a factor in life insurance underwriting, it could snowball so that it is taken into account in other settings, such as auto and health insurance. Women may be able to obtain cheaper life insurance, but the health care rates for some may be higher due to, as just one example, the costs of maternity care. 

We will see what the governor does….

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