States try to protect life insurance of soldiers in gulf

WASHINGTON — WASHINGTON -- Officials in three states are taking aim at life insurance policy clauses that deny war-related coverage to reservists and others on active military duty.

Initiatives in Virginia, New York and Delaware seek to protect the group and individual life insurance policies of reservists serving in the Persian Gulf, state officials said.


No bills on the subject have been introduced in Maryland's General Assembly, and industry members say they've heard nothing from Insurance Commissioner John A. Donaho.

James O'C. Gentry, vice president and general counsel for Monumental Life Insurance Co. in Baltimore, said his firm does not use a "war clause" in its policies, one that denies benefits for policyholders killed in combat. But Monumental will notwrite new life policies for soldiers or civilians headed for the Persian Gulf, or any of about 40 other "hot spots" around the globe.


"I would hope people would be realistic to know that there are some risks that just can't be taken by private companies," Mr. Gentry said, noting that about 10 percent of Monumental's policyholders are military officers and non-commissioned officers who would be covered if they should die in combat.

In Virginia, a state with a relatively large population of military people, the Legislature passed a bill on Feb. 14 limiting insurers' freedom to refuse to write new group or individual life insurance policies covering combatants.

"No person shall refuse to issue or to continue to issue a life insurance policy on the life of any member of the U.S. armed forces, the reserves or the National Guard due to their status as a member of such military organization or their duty assignment while a member of such military organization," the Virginia bill says.

"In circumstances where an individual's or family member's coverage under a group life or health insurance policy was terminated due to such individual's status as a member of the U.S. armed forces, reserves or National Guard, no person shall refuse to reinstate such coverage . . . upon the individual's return to eligibility status under the policy," the bill adds.

The reinstated coverage "shall not contain any new limitations or exclusions" related to military service, the bill says.

The measure, sponsored by Delegate Glen McClanan and Sen. Moody Stallings, will be sent to Virginia Gov. Douglas Wilder for his signature.

In New York, a state Senate committee reported out a bill on Feb. 12 that would limit insurers' powers to insert war exclusion clauses in new life insurance policies.

The bill, sponsored by Sen. William Larkin, would apply to both group and individual life insurance policies. It has been sent to the full Senate for a vote.


Under the bill, no life insurance policy that covers reservists and National Guardsmen who are called to active duty may exclude payment of benefits for a death due to military service.

The measure applies prospectively only, noted Dan Degnan, counsel to Mr. Larkin. If the bill passes, insurers would be free to decide whether they want to write new life insurance policies even though they cannot exclude war-related deaths from coverage, he said.

With an all-volunteer army backed by reservists, more civilian insureds can be expected to be called up for military duty, Mr. Degnan said.

"We don't know how many grouplife insurance policies have war exclusion clauses now," Mr. Degnan added. "We are trying to close the barn door before the horse gets out."

In Delaware, Insurance Commissioner David Levinson has taken a public relations tack to discourage insurers from refusing life coverage for military reservists headed for the gulf.

He has threatened to publish the names of companies that refuse to write life insurance for military people in general or for people going to war zones.


He set a deadline that expires today for publishing the names.

Mr. Levinson has surveyed all 667 insurance companies licensed in Delaware, asking whether they refuse to write life insurance for reservists or other military people going to the Persian Gulf.

Over 400 insurers responded to the survey saying that they do not refuse such coverage, an aide to Mr. Levinson said.