It happens over and over again: A planned trip to Israel induces gasps of worry from friends who have never visited the country. Every suicide bombing or mortar attack on television reinforces the vision of Israel as a vast raging war zone.
Some travelers appreciate the concern; others simply ignore it. But this perception of danger has had serious repercussions for people in California and in other states. For several years at least, life insurance companies doing business in California and elsewhere have been denying coverage or charging increased premiums to individuals who have either recently visited Israel or plan to visit soon. The assumption is that the country is just too dangerous, and that someone foolish enough to risk going to Israel once is likely to do so again.
A bill making its way through the California Legislature would make it illegal to impose such a penalty on travelers to Israel or any other country. Two similar bills are before House of Representatives in Washington, D.C.
"Traveling to Israel is so broad," said Nancy Appel, Anti-Defamation League regional deputy director, who testified in support of the state legislation, Senate Bill 1105, at a July committee hearing. Compare "traveling to Eilat vs. going to a war-zone area." For insurance companies to discriminate on the basis of travel anywhere in the country is "like swatting a fly with a sledgehammer," Appel told The Journal.
Momentum appears to favor her view. The states of Washington, New York and Illinois have recently passed similar legislation, although the latter two only ban discrimination based on past travel, rather than future plans. A House bill by Rep. Rahm Emmanuel (D-Ill.), the Life Insurance Anti-Discrimination in Travel Act, deals specifically with past travel, while a bill by Rep. Debbie Wasserman Schultz (D-Fla.), the Life Insurance Fairness for Travelers Act, bans insurance discrimination based on future plans.
In the Legislature, the bill was quickly introduced in midterm by Sen. Jackie Speier (D-San Francisco), with the support of Attorney General Bill Lockyer, who is running for state treasurer in 2006.
"This bill appeared right in the middle of the session, and we only saw it a week before it was heard in the Assembly Insurance Committee," said Brad Wenger, president of the Association of California Life and Health Insurance Companies, which represents the insurance industry's legislative interests in Sacramento.
The association opposed the bill at first, but then Speier's staff struck a hallway compromise that could prove to be a model in other states or even nationally.
To secure industry support, Speier agreed that a company could deny coverage or charge higher rates if it could justify that decision by citing "sound actuarial principles" or "reasonably expected experience." After adding that language, the association immediately changed its official position on the bill to "neutral," making its passage a near certainty.
In plain English, the bill now allows insurers to penalize travelers to Israel only if they have actual evidence that higher risk exists. A similar resolution was reached in the 1980s, after the industry came under pressure for allegedly discriminating against the disabled.
"SB 1105 gives the California Department of Insurance the ability to ask an insurer what they're basing a [discriminatory] decision on, and they would require a pretty good case to be made," Wenger said.
Wenger quickly added that the department already can investigate alleged discriminatory practices.
"This just makes it a little more specific," he said.
"Everybody was comfortable [that] this language would not create a loophole," Appel added. "If they have hard data backing up their opinion to deny coverage or charge more, they can do that. The problem now is that they deny coverage with no data backing up their reasons."
Still, the definition of "data" can be vague. Some past coverage denials were ostensibly based on State Department travel warnings, which, though anecdotal, derive from a credible source. Such a warning is currently in effect. The State Department cites recent bombings and notes, "The U.S. government has received information indicating that American interests within Israel could be the focus of terrorist attacks."
Wenger did not provide specific examples of what would constitute sound actuarial principles in the context of the California legislation.
"It's a very, very competitive market out there," he said. "I think you have to have some sympathy for [the insurance company] when there is a place in the world that is either at war or in a very dangerous situation."
With the insurance industry's official neutrality, the state legislation without opposition in the California Assembly on Aug. 18. The bill is now headed to the state Senate. If it passes there, as expected, the measure would reach the desk of Gov. Arnold Schwarzenegger, who has not yet taken an official position on the bill.
"It's just amazing," Appel said. "Some bills take forever to get written [but] this one happened very fast."
Whether the bill has the intended effect will take longer to work out.