Document 41: "Plank 14: Insurance," from National Commission on the Observance of International Women's Year, The Spirit of Houston: The First National Women's Conference (Washington, D.C.: U.S. Government Printing Office, 1978), pp. 60-62.



p. 60



PLANK 14
INSURANCE

State legislatures and State insurance commissioners should adopt the Model Regulation to Eliminate Unfair Sex Discrimination of the National Association of Insurance Commissioners. The regulation should be amended and adopted to include prohibition of the following practices:

Background:

"Women cannot buy certain kinds of insurance.

   A thorough investigation of sex discrimination in insurance convinced former Pennsylvania Insurance Commissioner Herbert S. Denenberg that "discrimination against women is built right into the insurance system." The charge is amply documented by the report of the Michigan Insurance Department's Women's Task Force as well as in similar reports published by other States. A particularly pervasive discrimination is the exclusion of coverage for pregnancy and related expenses in health and disability insurance, whether purchased individually or through employers.

   Women cannot buy certain kinds of insurance, a number of experts testified before the Joint Congressional Committee on Economic Discrimination Against Women. Working women may not be able to get noncancellable policies, lifetime benefits, riders offering future coverage on favorable terms, or even as much dollar protection against loss of income through disability as males, even when their earnings are the same. They may not be able to get disability insurance at all for a number of reasons: if they work in certain occupational categories for which coverage is available for men; if they cannot demonstrate a well-established pattern of full-time employment; if they earn their money at home; or if they are homemakers.

Disability payments for pregnancy   When disability policies are available to women, they generally do not regard pregnancy as a disability. The policies do not cover loss of income due to childbirth, abortion, or miscarriage and they may require waiting periods before coverage is effective or impose other limitations on the coverage of disabilities caused by "diseases of the female genital organs." Disabilities resulting from disorders of female reproductive organs may not be covered at all, though disorders of male reproductive organs are generally covered.

   Health insurance policies often exclude maternity expenses or severely limit the benefit both in amount and eligibility. Sterilization operations may be covered for males but not for females. "All female reproductive organs" may be excluded on the basis of a women's medical history. And, as in disability policies, health policies may deny favorable riders to women.

   The rationale used by the insurance companies to exclude pregnancy from disability benefits is that pregnancy is a choice for which the woman is solely responsible and for which she must suffer the disabilities. But Barbara Shack, assistant director of the New York Civil Liberties Union, pointed out to the Joint Congressional Committee that since "women serve the biological function of continuing species, society should share the disabilities and costs instead of penalizing her for her necessary physiological role."

Pregnancy benefits: current status   Lack of maternity coverage means that American women and their families must pay most of the cost of pregnancy, childbirth, and the medical care for their newborn babies. On December 7, 1976, in General Electric v. Gilbert, the U.S. Supreme Court ruled that Title 7 of the Civil Rights Act of 1964 did not require companies to treat pregnancy benefits on the same basis as other temporary disabilities.

   Outraged women immediately pressed for a law prohibiting discrimination on the basis of pregnancy. The Senate bill was passed on September 16, 1977, and a House bill, to which an anti-abortion rider was attached, was approved in committee in March 1978. The American Council of Life Insurance objects that the additional costs of providing pregnancy benefits could cost business $1.7 billion in 1978, but AFL-CIO studies put it at only $130 million.

Insurance based on marital status   Insurance also discriminates against women on the basis of marital status. Inequities of many kinds arise when women are covered as dependents of men rather than as individuals in their own right. Health insurance plans may cover the wives but not the husbands of employees. They may enroll men but not married women as individuals. Female employees

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may receive smaller maternity benefits than the wife of a male employee, and they may get none at all if they are single. When a woman is divorced and covered under a group health plan by her husband's employer, she may have to pay sharply increased premiums in order to continue her protection on an individual basis. Similar discrimination exists in auto insurance, where the common practice of insuring the husband for the family car results in much higher premiums for the divorced female when she seeks coverage in her own name.

   Life insurance coverage for a married woman may depend on the amount of her husband's coverage and may require that the husband's policy be larger. Group plans often treat widowers less favorably than widows. A wife covered under a company pension plan may be left without protection after divorce, and she may be left entirely without income if her husband dies before retirement age.

   Finally, car and homeowner's insurance discriminates against the rising proportion of women who are single, divorced, or living alone. In New York State, for instance, an 18-year-old woman pays less car insurance if she is married than if she is single. According to Catherine Timlin, who conducted a study of insurance for the Los Angeles chapter of the National Organization for Women, "carriers say there is no one to take out the trash or clear the brush if a women is living alone, so there is a fire hazard."

Higher costs for women   Insurance costs women more than men. In disability protection, the amount of coverage can be less for a woman, waiting periods longer, and premiums higher for the same benefits available to men. If disability protection is available to a homemaker, she may have to pay more for it than if she had been employed outside of the home.

   In health insurance, women are frequently charged higher rates for individual policies even when maternity benefits are excluded. Premiums for group health insurance may rise with the proportion of women in the group.

   Barbara Shack, in her testimony, blamed these high costs on the prevailing attitude in the insurance industry that "women are only temporary members of the work force, dependent on a male primary wage earner, burdened with home responsibilities that cause her to feign sickness so she can collect insurance benefits, or poised to have a litter and retire as the happy homemaker, duping her employer and the insurance companies out of benefits intended for regular members of the work force." As she and every other expert before the committee pointed out, this attitude deprives many millions of women and their families of economic security that is available to men.

Sex-based rate tables   The heart of discrimination against women is the maintenance of separate rate tables based on the difference in risk between the sexes. Former Congresswoman Martha Griffiths, who chaired the congressional hearings on discrimination in insurance, noted that women generally are considered high risks by insurance companies. "The people in this category, whom the insurance companies usually refer to as clunkers, include all women along with residents of poor neighborhoods, reckless drivers, and those who work in hazardous occupations."

   Testifying at that same hearing, Pennsylvania Commissioner Denenberg said that the time has come to drop classifications by sex. He pointed out that the companies used to have a separate classification for blacks, but that is now "unacceptable from a public policy standpoint. Like classifications based on color, sex classifications have also become suspect…. With changes in the economic position of women, the once homogenous classification of women has become less meaningful."

   The insurance companies may soon have no choice. Courts are beginning to demand the pooling of these risks as other differences among individuals are pooled. In Marie Manhart el al v. City of Los Angeles Department of Water and Power, the Court of Appeals upheld an injunction against "requiring individual female employees to make larger contributions than individual male employees to the Department of Water and Power employee retirement plan."

Model regulations and their drawbacks   Some States are moving against insurance inequities. About a fourth have endorsed the reforms of the Model Regulation to Eliminate Unfair Sex Discrimination adopted by the National Association of Insurance Commissioners in 1975, but according to Naomi Naierman, author of Discrimination in Insurance, loopholes in the NAIC prohibitions make it easy for companies to get around them. She points out, for instance, that a company may comply by making health insurance for pregnancy available only at prohibitively high cost or in limited quantity.

   At best, the NAIC Model Regulations do not touch coverage for maternity and equality of benefits for men and women, principles mandated by regulations of the Equal Employment Opportunity Commission.

   Under the Model Regulation, the following practices are prohibited:

  1. Denying coverage to females gainfully employed at home, employed part time, or employed by relatives when coverage is offered to males similarly employed.



    2. p. 62



  2. Denying policy riders to females when the riders are available to males.

  3. Denying maternity benefits to an insured or prospective insured individual

    4. purchasing an individual contract when comparable family coverage contracts offer maternity benefits.

  4. Denying, under group contracts, dependent coverage to husbands of female employees when dependent coverage is available to wives of male employees.

  5. Denying disability income contracts to employed women when coverage is offered to men similarly employed.

  6. Treating complications of pregnancy differently from any other illness or sickness under the contract.

  7. Restricting, reducing, modifying, or excluding benefits relating to coverage involving the genital organs of only one sex.

  8. Offering more restrictive benefit periods and more restrictive definitions of disability income contract.

  9. Establishing different conditions by sex under which the policyholder may exercise benefit options contained in the contract.

  10. Limiting the amount of coverage an insured or prospective insured person may purchase based on marital status unless such limitations is for the purpose of defining persons eligible for dependent benefits.

   

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