II

104TH CONGRESS

2D SESSION S. 1630

To prevent discrimination against victims of abuse in all lines of insurance.

IN THE SENATE OF THE UNITED STATES

MARCH 20, 1996

Mr. WELLSTONE (for himself and Mr. WYDEN) introduced the following bill;

which was read twice and referred to the Committee on Labor and

Human Resources

A BILL

To prevent discrimination against victims of abuse in all

lines of insurance.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Victims of Abuse

5 Insurance Protection Act’’.

6 SEC. 2. DEFINITIONS.

7 As used in this Act:

8 (1) The term ‘‘abuse’’ means the occurrence of

9 one or more of the following acts between household

10 or family (including in-laws or extended family)
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1 members, spouses or former spouses, or individuals

2 engaged in or formerly engaged in a sexually inti3 mate relationship:

4 (A) Attempting to cause or intentionally,

5 knowingly, or recklessly causing another person

6 bodily injury, physical harm, substantial emo7 tional distress, psychological trauma, rape, sex8 ual assault, or involuntary sexual intercourse.

9 (B) Engaging in a course of conduct or re10 peatedly committing acts toward another per11 son, including following the person without

12 proper authority and under circumstances that

13 place the person in reasonable fear of bodily in14 jury or physical harm.

15 (C) Subjecting another person to false im16 prisonment or kidnapping.

17 (D) Attempting to cause or intentionally,

18 knowingly, or recklessly causing damage to

19 property so as to intimidate or attempt to con20 trol the behavior of another person.

21 (2) The term ‘‘abuse-related medical condition’’

22 means a medical condition which arises in whole or

23 in part out of an action or pattern of abuse.

24 (3) The term ‘‘abuse status’’ means the fact or

25 perception that a person is, has been, or may be a
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1 subject of abuse, irrespective of whether the person

2 has sustained abuse-related medical conditions or

3 has incurred abuse-related claims.

4 (4) The term ‘‘health benefit plan’’ means any

5 public or private entity or program that provides for

6 payments for health care, including—

7 (A) a group health plan (as defined in sec8 tion 607 of the Employee Retirement Income

9 Security Act of 1974) or a multiple employer

10 welfare arrangement (as defined in section

11 3(40) of such Act) that provides health bene12 fits;

13 (B) any other health insurance arrange14 ment, including any arrangement consisting of

15 a hospital or medical expense incurred policy or

16 certificate, hospital or medical service plan con17 tract, or health maintenance organization sub18 scriber contract;

19 (C) workers’ compensation or similar in20 surance to the extent that it relates to workers’

21 compensation medical benefits (as defined by

22 the Federal Trade Commission); and

23 (D) automobile medical insurance to the

24 extent that it relates to medical benefits (as de25 fined by the Federal Trade Commission).
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1 (5) The term ‘‘health carrier’’ means a person

2 that contracts or offers to contract on a risk-assum3 ing basis to provide, deliver, arrange for, pay for or

4 reimburse any of the cost of health care services un5 less the person assuming the risk is accepting the

6 risk from a duly licensed health carrier.

7 (6) The term ‘‘insured’’ means a party named

8 on a policy, certificate, or health benefit plan as the

9 person with legal rights to the benefits provided by

10 the policy, certificate, or health benefit plan. For

11 group insurance, such term includes a person who is

12 a beneficiary covered by a group policy, certificate,

13 or health benefit plan.

14 (7) The term ‘‘insurer’’ means any person, re15 ciprocal exchange, interinsurer, Lloyds insurer, fra16 ternal benefit society, or other legal entity engaged

17 in the business of insurance, including agents, bro18 kers, adjusters, and third party administrators. The

19 term also includes health carriers, health benefit

20 plans, and life, disability, and property and casualty

21 insurers.

22 (8) The term ‘‘policy’’ means a contract of in23 surance, certificate, indemnity, suretyship, or annu24 ity issued, proposed for issuance or intended for is-
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1 suance by an insurer, including endorsements or rid2 ers to an insurance policy or contract.

3 (9) The term ‘‘subject of abuse’’ means a per4 son to whom an act of abuse is directed, a person

5 who has had prior or current injuries, illnesses, or

6 disorders that resulted from abuse, or a person who

7 seeks, may have sought, or should have sought medi8 cal or psychological treatment for abuse, protection,

9 court-ordered protection, or shelter from abuse.

10 SEC. 3. DISCRIMINATORY ACTS PROHIBITED.

11 (a) IN GENERAL.—No insurer or health carrier may,

12 directly or indirectly, engage in any of the following acts

13 or practices on the basis that the applicant or insured,

14 or any person employed by the applicant or insured or

15 with whom the applicant or insured is known to have a

16 relationship or association, is, has been, or may be the

17 subject of abuse:

18 (1) Denying, refusing to issue, renew or reissue,

19 or canceling or otherwise terminating an insurance

20 policy or health benefit plan.

21 (2) Restricting, excluding, or limiting insurance

22 or health benefit plan coverage for losses as a result

23 of abuse or denying a claim incurred by an insured

24 as a result of abuse, except as otherwise permitted
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1 or required by State laws relating to life insurance

2 beneficiaries.

3 (3) Adding a premium differential to any insur4 ance policy or health benefit plan.

5 (4) Terminating health coverage for a subject

6 of abuse because coverage was originally issued in

7 the name of the abuser and the abuser has divorced,

8 separated from, or lost custody of the subject of

9 abuse or the abuser’s coverage has terminated volun10 tarily or involuntarily and the subject of abuse does

11 not qualify for extension of coverage under part 6 of

12 subtitle B of title I or the Employee Retirement In13 come Security Act of 1974 (29 U.S.C. 1161 et seq.)

14 or 4980B of the Internal Revenue Code of 1986.

15 Nothing in this paragraph prohibits the insurer from

16 requiring the subject of abuse to pay the full pre17 mium for the subject’s coverage under the health

18 plan. The insurer may terminate group coverage

19 after the continuation coverage required by this

20 paragraph has been in force for 18 months if it of21 fers conversion to an equivalent individual plan. The

22 continuation of health coverage required by this

23 paragraph shall be satisfied by any extension of cov24 erage under part 6 of subtitle B of title I or the Em25 ployee Retirement Income Security Act of 1974 (29
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1 U.S.C. 1161 et seq.) or 4980B of the Internal Reve2 nue Code of 1986 provided to a subject of abuse and

3 is not intended to be in addition to any extension of

4 coverage provided under part 6 of subtitle B of title

5 I or the Employee Retirement Income Security Act

6 of 1974 (29 U.S.C. 1161 et seq.) or 4980B of the

7 Internal Revenue Code of 1986.

8 (b) USE OF INFORMATION.—

9 (1) IN GENERAL.—No insurer may use, dis10 close, or transfer information relating to an appli11 cant’s or insured’s abuse status or abuse-related

12 medical condition or the applicant’s or insured’s sta13 tus as a family member, employer or associate, per14 son in a relationship with a subject of abuse for any

15 purpose unrelated to the direct provision of health

16 care services unless such use, disclosure, or transfer

17 is required by an order of an entity with authority

18 to regulate insurance or an order of a court of com19 petent jurisdiction or by abuse reporting laws. Noth20 ing in this paragraph shall be construed as limiting

21 or precluding a subject of abuse from obtaining the

22 subject’s own medical records from an insurer.

23 (2) AUTHORITY OF SUBJECT OF ABUSE.—A

24 subject of abuse, at the absolute discretion of the

25 subject of abuse, may provide evidence of abuse to
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1 an insurer for the limited purpose of facilitating

2 treatment of an abuse-related condition or dem3 onstrating that a condition is abuse-related. Nothing

4 in this paragraph shall be construed as authorizing

5 an insurer or health carrier to disregard such pro6 vided evidence.

7 SEC. 4. REASONS FOR ADVERSE ACTIONS.

8 An insurer that takes any adverse action relating to

9 any plan or policy of a subject of abuse, shall advise the

10 subject of abuse applicant or insured of the specific rea11 sons for the action in writing. Reference to general under12 writing practices or guidelines does not constitute a spe13 cific reason.

14 SEC. 5. LIFE INSURANCE.

15 Nothing in this Act shall be construed to prohibit a

16 life insurer from declining to issue a life insurance policy

17 if the applicant or prospective owner of the policy is or

18 would be designated as a beneficiary of the policy, and

19 if—

20 (1) the applicant or prospective owner of the

21 policy lacks an insurable interest in the insured; or

22 (2) the applicant or prospective owner of the

23 policy is known, on the basis of police or court

24 records, to have committed an act of abuse.
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1 SEC. 6. SUBROGATION WITHOUT CONSENT PROHIBITED.

2 Except where the subject of abuse has already recov3 ered damages, subrogation of claims resulting from abuse

4 is prohibited with the informed consent of the subject of

5 abuse.

6 SEC. 7. ENFORCEMENT.

7 (a) FEDERAL TRADE COMMISSION.—The Federal

8 Trade Commission shall have the power to examine and

9 investigate any insurer to determine whether such insurer

10 has been or is engaged in any act or practice prohibited

11 by this Act. If the Federal Trade Commission determines

12 an insurer has been or is engaged in any act or practice

13 prohibited by this Act, the Commission may take action

14 against such insurer by the issuance of a cease and desist

15 order as if the insurer was in violation of section 5 of the

16 Federal Trade Commission Act. Such cease and desist

17 order may include any individual relief warranted under

18 the circumstances, including temporary, preliminary, and

19 permanent injunctive and compensatory relief.

20 (b) PRIVATE CAUSE OF ACTION.—An applicant or in21 sured claiming to be adversely affected by an act or prac22 tice of an insurer in violation of this Act may maintain

23 an action against the insurer in a Federal or State court

24 of original jurisdiction. Upon proof of such conduct by a

25 preponderance of the evidence, the court may award ap26 propriate relief, including temporary, preliminary, and
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1 permanent injunctive relief and compensatory and puni2 tive damages, as well as the costs of suit and reasonable

3 fees for the aggrieved individual’s attorneys and expert

4 witnesses. With respect to compensatory damages, the ag5 grieved individual may elect, at any time prior to the ren6 dering of final judgment, to recover in lieu of actual dam7 ages, an award of statutory damages in the amount of

8 $5,000 for each violation.

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