U.S. life insurers impose waiting periods to skirt
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[March 19, 2020] By
(Reuters) - U.S. life insurers are trying
to curb their own risks to coronavirus by imposing waiting periods for
applicants who have traveled to regions with widespread outbreaks,
industry experts said.
Life insurers are worried about insuring U.S. customers who have
traveled to countries that the U.S. Centers for Disease Control deems
most concerning for contagion risk, including China, Iran, and many
Lincoln Financial Group <LNC.N>, on Monday imposed a 30-day waiting
period before issuing policies to most applicants who have traveled to
those regions, a spokesman said.
American International Group Inc <AIG.N>, said earlier this month it
would postpone decisions about life insurance applications from
customers who traveled to several affected regions, including Italy and
South Korea, until they were back in the United States for 30 days,
according to a memo seen by Reuters.
AIG is closely monitoring ongoing developments and following
recommendations from the World Health Organization (WHO) and Centers for
Disease Control, a spokesman said.
Life insurers often ask applicants about travel plans to screen whether
they could be at risk for serious diseases, such as malaria, or
An "extreme lack of data" about the coronavirus, is amplifying those
concerns, said Anthony Martin, chief executive officer of Choice Mutual,
an online life insurance brokerage in Reno, Nevada.
"Life insurance companies hate unknowns more than anything else,” Martin
Spread of the virus across the United States could push insurers toward
draconian measures, said Tim Luedtke, an actuary and professor at Temple
University in Philadelphia.
"I fully expect that they will stop taking applications," Luedtke said.
Credit ratings firms AM Best and Fitch Ratings this week revised their
outlooks for U.S. life insurers from stable to negative as the global
economic meltdown rattle U.S. life insurers
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The AIG logo is seen at its building in New York's financial
district March 19, 2015. REUTERS/Brendan McDermid
An historic stock market slump and interest rate cuts will pressure life
insurers’ earnings, reserves and capital, Fitch said on Tuesday.
Insurers also face a potential spike in virus-related deaths, Fitch said.
Companies that perform medical exams of life insurance applicants are also
changing guidelines for workers' safety, spurring more delays.
ExamOne, a Quest Diagnostics Inc unit <DGX.N> said it is asking insurance
applicants if they have been to “any restricted travel area” or taken a cruise,
the company said on Tuesday. Those individuals must delay exams for 14 days.
Jonathan Fritz, 34, of Roswell, Georgia, said he was scheduled to have a medical
exam on Monday for a $1.9 million policy from insurer USAA, which he sought
after his second child was born.
On Sunday, APPS, a company that conducts the exams, delayed Fritz' appointment
for 14 days after asking if he had a cough. Fritz did.
"USAA has taken steps to reduce the risk of infection for our members, employees
and partners" as the virus begins to have a greater impact, a spokesman said.
An APPS representative did not respond to a request for comment.
Fritz worries about a possible lockdown and more delays. “If it goes much
further, I’m really concerned that I don’t have the coverage in place,” he said.
(Reporting by Suzanne Barlyn in Washington Crossing, Pennsylvania; Editing by
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