No. 93-363 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1993 

BANKERS LIFE & CASUALTY CO. , 

Petitioner and Appellant, 

LEA PETERSON, LORILI BARNETT, 

KRISTI WOLF, DIANE CHAIDEZ and 

MONTANA HUMAN RIGHTS COMMISSION, t 

Respondents and ~espondents. ! 

CLERK OF SUPREME: COURT 

STATE OF MONTANA 

APPEAL FROM: District Court of the Judicial District, 

In and for the County of Lewis and Clark, 

The Honorable Dorothy McCarter, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Tom K. Hopgood, Luxan & Murfitt, Helena, Montana 

For Respondent: 

Peter M. Meloy, Meloy Law Firm, Helena, Montana; 

David Rusoff, Montana Human Rights Commission, 

'Helena, Montana 

Filed: 

Submitted: November 30, 1993 

Decided: December 28, 1993 
Just .ice Karla M. Gray delivered the Opinion of the Court. 

In a case of first impression, the issue before this Court is 

whether an individual major medical expense insurance policy that 

excludes coverage for normal pregnancy and childbirth violates g 

49-2-309, MCA. Unique to Montana, 5 49-2-309, MCA, prohibits 

discrimination based solely on sex in the issuance, operation, 

coverage, rates or premiums of any type of insurance policy. The 

First Judicial District Court, Lewis and Clark County, affirmed a 

determination by the Montana Human Rights Commission (the 

commission) that the policy issued by Bankers Life and Casualty Co. 

(Bankers Life) unlawfully discriminated against female 

policyholders. We affir.m the District Court. 

Bankers Life is an insurance company authorized to do business 

in Montana. Lorili Barnett, Lea Peterson, Kristi Wolf and Diane 

Chaidez (collectively the Charging Parties), in separate 

transactions, purchased a "Major Medical Expense PolicyuT from 

Bankers Life. The policies contained the following provisions at 

issue in this case: 

BENEFIT PROVISIONS - We'll pay covered expenses incurred 

by a family member due to injury, sickness or mental 

illness. 

EXCEPTIONS - This policy does not cover expenses for: 

(13) Normal pregnancy and childbirth. Complications of 

pregnancy expenses are covered as a sickness. 

In conjunction with this policy, Bankers Life offered an optional 

Maternity Benefits Rider which would provide coverage for normal 
pregnancy and childbirth expenses. The Charging Parties did not 

purchase the Maternity Benefits Rider. 

The Charging Parties subsequently gave birth and submitted 

their normal maternity expenses to Bankers ~ife; Bankers Life 

denied coverage for those expenses. Pursuant to 5 49-2-309, MCA, 

each of the Charging Parties filed a complaint with the Commission, 

alleging unlawful sex discrimination in an insurance policy. The 

four cases were consolidated and a hearing was held on January 24, 

1992. The Commission issued its Findings of Fact, Conclusions of 

Law and Order on April 17, 1992, determining that Bankers Life had 

unlawfully discriminated against the Charging Parties by excluding 

coverage and denying benefits for normal maternity expenses. 

Bankers Life petitioned the District Court for judicial review 

of the Commission's decision on May 8, 1992. The State of Montana, 

on behalf of the Commission, was granted leave to intervene in the 

action. After oral argument, the District Court issued its 

decision and order on May 19, 1993, determining that, because 

pregnancy occurs only to women, any classification which relies on 

pregnancy as the determinative criterion is a distinction based on 

sex. Because Bankers Life's policy excluded benefits for pregnancy 

and childbirth, the court concluded that the policy unlawfully 

discriminated against female policyholders in violation of g 49-2- 

309, MCA. 

The parties agree that only issues of law are before this 

Court. Therefore, our standard of review is whether the District 

Court's interpretation of the law is correct. Mooney v. Brennan 
(1993), 257 Mont. 197, 199, 848 P.2d 1020, 1022. Thus, we focus on 

the ~istrict Court's interpretation of 5 49-2-309, MCA, in light of 

the agreed facts. The legal issues before us are whether 5 49-2- 

309, MCA, prohibits discrimination on the basis of pregnancy in a 

major medical expense insurance policy and, if so, whether the 

Bankers Life policies at issue violate the statute. 

1) Does $ 49-2-309, MCA, prohibit discrimination on the basis 

of pregnancy in a major medical expense insurance policy? 

The District Court concluded that discrimination on the basis 

of pregnancy constitutes discrimination on the basis of sex, 

relying on Massachusetts Elec. Co. v. Massachusetts Comm'n Against 

Discrimination (Mass. 1978), 375 N.E.2d 1192, 1198. As a result, 

the court concluded that 5 49-2-309, MCA, prohibits discrimination 

on the basis of pregnancy. On appeal, Bankers Life contends that 

this conclusion is erroneous as a matter of law. 

This Court has not interpreted 5 49-2-309, MCA, since its 

passage in 1983. The statute, which is sometimes referred to as 

Montana's "unisex" insurance statute, provides in pertinent part: 

Discrimination in insurance and retirement plans. (1) It 

is an unlawful discriminatory practice for any financial 

institution or person to discriminate solely on the basis 

of sex or marital status in the issuance or operation of 

any type of insurance policy, plan, or coverage or in any 

pension or retirement plan, program, or coverage, 

including discrimination in regard to rates or premiums 

and payments or benefits. 

Section 49-2-309, MCA, has no federal or sister-state counterpart. 

Thus, federal cases and cases from other states interpreting antidiscrimination statutes in different scenarios are not binding on 

this Court. Indeed, even the Montana cases discussed below 
involved different sections of the Montana Human Rights Act. 

Bankers Life relies on General Electric Co. v. Gilbert (1976), 

429 U.S. 125, 97 S.Ct. 401, 50 L.Ed.2d 343, and its limited 

progeny, to support the assertion that pregnancy-related 

distinctions do not constitute sex discrimination. Gilbert held 

that an employee disability benefit plan which excluded benefits 

for pregnancy did not unlawfully discriminate on the basis of sex 

in violation of Title VII of the 1964 Human Rights Act, 42 U.S.C. 

2000e-2(a)(l) (Title VII). Gilbert, 420 U.S. at 135, 97 S.Ct. at 

407, 50 L.Ed.2d at 353. Although the language in Gilbert appears 

to support Bankers Life's position, Gilbert is not controlling 

authority for numerous reasons. 

First, the United States Supreme Court's interpretation of the 

federal statute prohibiting sex discrimination in employment is not 

binding on this Court's interpretation of Montana's unisex 

insurance statute. See North v. Bunday (1987), 226 Mont. 247, 254, 

735 P.2d 270, 275. Moreover, Congress effectively overruled 

Gilbert by passing the Pregnancy Discrimination Act, which amended 

Title VII to specifically include pregnancy as a basis of unlawful 

discrimination in matters of employment. 42 U.S.C. 2000e(k). 

Following the passage of the Pregnancy Discrimination Act, the 

United States Supreme Court stated that Congress had overruled 

Gilbert and unequivocally held that discrimination based on a 

woman's pregnancy is, on its face, discrimination because of her 

sex. Newport News Shipbuilding & Dry Dock Co. v. EEOC (1983), 462 

U.S. 669, 684, 103 S.Ct. 2622, 2632, 77 L.Ed.2d 89, 103. 
Most importantly, like the majority of state courts, this 

Court refused to follow Gilbert. See Mountain States Telephone v. 

Comm'r of Labor (1980), 187 Mont. 22, 608 P.2d 1047. As we stated 

in Mountain States: 

[mlountain Bellts.position fails to take into account the 

rather checkered history of Gilbert, including the recent 

significant addition to Title VII demonstrating a 

contrary congressional intent, and the cases decided 

after Gilbert, demonstrating a consistent refusal on the 

part of the majority of the courts to follow Gilbert. 

Mountain States, 608 P.2d at 1055. We decline to follow Gilbert in 

this case and, indeed, consider Montana law sufficient to resolve 

this issue 

In Mountain States, this Court determined that distinctions 

based on pregnancy are sex-linked classifications. Although we 

were primarily concerned with the question of federal preemption of 

the Montana Maternity Leave Act, 5 49-2-310 and -311, MCA, we 

stated that: 

[plregnancy is a condition unique to women, and the 

ability to become pregriant is a primary characteristic of 

the female sex. Thus, any classification which relies on 

pregnancy as the determinative criterion is a distinction 

based on sex. . . By definition, [placing pregnancy in 

a class by itself] discriminates on account of sex; for 

it is the capacity to become pregnant which primarily 

differentiates the female from the male. 

Mountain States, 608 P.2d at 1056 (citations omitted). Citing 

Massachusetts Elec., we stated that the exclusion of pregnancyrelated disabilities from a comprehensive disability plan 

constituted sex discrimination in employment. Mountain States, 608 

In 1984, we reaffirmed the principle that differential 
treatment of pregnancy is gender-based discrimination because only 

women can become pregnant. Miller-Wohl Co. , Inc. v. Comm'r of 

Labor (1984), 214 Mont 238, 254, 692 P.2d 1243, 1251. Again, the 

primary issue in that case was one of federal preemption. However, 

in Miller-Wohl, we determined that an employer's sick leave policy 

created a disparate effect on women who became pregnant compared to 

men who did not. Although the policy was facially neutral, it 

nonetheless subjected women to job termination on a basis not faced 

by men. We concluded, therefore, that the policy was gender-based 

discrimination. Miller-Wohl, 692 P.2d at 1052. 

Mountain States and Miller-Wohl established that differential 

treatment of pregnancy constitutes sex discrimination in Montana. 

Section 49-2-309, MCA, prohibits sex discrimination in the 

operation, coverage, pricing and benefits of an insurance policy. 

We conclude, therefore, that 5 49-2-309, MCA, prohibits 

discrimination based on pregnancy in a major medical expense 

insurance policy. The plain language of § 49-2-309, MCA, and our 

previous holdings in Mountain States and Miller-Wohl, amply support 

our conclusion. 

We note, moreover, that the majority of courts considering the 

issue of whether distinctions based on pregnancy constitute sex 

discrimination under statutes involving both employment and nonemployment situations have reached similar conclusions. For 

example, in Civil Rights Comm'n v. Travelers Ins. Co. (Colo. 1988), 

759 P.2d 1358, an employer provided a comprehensive group medical 

insurance policy as a benefit to its employees; the policy excluded 
coverage for medical expenses resulting from normal pregnancy but 

covered complications arising from pregnancy. The Colorado Supreme 

Court, en banc, concluded that the policy violated a Colorado 

statute prohibiting sex discrimination in matters of employment 

compensation. Travelers, 759 P.2d at 1361. Also, in Kirsh v. 

State Farm Mut. Auto Ins. Co. (Cal.App. 1991), 284 Cal.Rptr. 260, 

266, the California Court of Appeals concluded that an insurance 

company violated the Unruh Act, which prohibits sex discrimination 

in all ubusiness establishments," by failing to cover pregnancyrelated expenses in an insurance policy. Additionally, in 

Binghamton Cr. Un. v. Div. of Human Rights (N.Y.App. 1990), 564 

N.E.2d 1051, 1054, the New York Court of Appeals determined that a 

disability insurance policy that excluded benefits for pregnancy 

and was offered in conjunction with an automobile loan was 

discriminatory because a woman could not obtain credit on the same 

terms as a man. 

Although the great weight of authority supports the District 

Court's determination that 5 49-2-309, MCA, prohibits 

discrimination based on pregnancy, Bankers Life argues that the 

legislature did not intend 5 49-2-309, MCA, to encompass pregnancyrelated distinctions. It asserts that the 1991 Legislature's 

failure to pass House Bill 388, which would have added specific 

language including pregnancy distinctions as sex discrimination to 

5 49-2-309, MCA, and its enactment of §§ 33-22-1201, MCA, et seq., 

demonstrate legislative intent that 5 49-2-309, MCA, does not 

include pregnancy-based discrimination. Bankers Life cites no 
relevant authority or legislative history to support either 

assertion. 

Section 49-2-309, MCA, is clear and unambiguous; it prohibits 

discrimination based on sex in insurance policies. Thus, no 

further interpretation is necessary. GBN, Inc. v. Montana Deprt of 

Revenue (1991), 249 Mont. 261, 265, 815 P.2d 595, 597. In any 

event, the legislature's failure to enact a proposed amendment is 

of little value in interpreting legislative intent because an 

amendment may be defeated for many reasons. In re Matter of W. J.H. 

(1987), 226 Mont. 479, 484, 736 P.2d 484, 487. Furthermore, 25 33- 

22-1201, MCA, et seq., merely authorizedthe Insurance Commissioner 

(Commissioner) to issue Itlimited benefit disability insurancet1 

policies, which are exempt from certain premium taxes. Sections 

33-22-1202 and -1205, MCA. Those polices are statutorily required 

to contain maternity benefits. Section 33-22-1203, MCA. Bankers 

Life has not demonstrated how the passage of this provision of the 

insurance code, seven years after the passage of the antidiscrimination statute, reflects any legislative intent regarding 

the unisex statute. 

Bankers Life also argues that, because the unisex statute does 

not specifically refer to discrimination based on pregnancy, this 

Court is not free to insert such terms. On that basis, Bankers 

Life asserts that we are prohibited from concluding that an 

exclusion for expenses for normal pregnancy and childbirth in a 

major medical expense policy violates 5 49-2-309, MCA. 

Section 1-2-101, MCA, which precludes courts from "adding" or 
"inserting" language into a statute, has no bearing here because we 

do not add anything to § 49-2-309, MCA, by our decision today. 

Section 49-2-309, MCA, is clearly intended to cover 

discriminations in insurance policies that are based solely on sex. 

As is usually the case, the legislature declined to enumerate all 

conceivable varieties of sex discrimination, but rather left the 

interpretation and application of this general anti-discrimination 

statute to the courts. Our task is merely to interpret 5 49-2-309, 

MCA, to determine whether distinctions based on normal pregnancy 

and childbirth constitute discrimination on the basis of sex. 

We conclude that discrimination on the basis of pregnancy is 

discrimination on the basis of sex and is, therefore, prohibited by 

the Montana unisex insurance statute. 

2) Do the major medical expense insurance policies issued by 

Bankers Life, which exclude expenses for normal pregnancy and 

childbirth, violate 5 49-2-309, MCA? 

The District Court concluded that the exclusion of normal 

pregnancy and childbirth expenses from Bankers Life's policies 

violated 9 49-2-309, MCA, reasoning that pregnancy is a physical 

condition requiring medical attention and the exclusion of 

maternity expenses imposes a hardship on women not imposed on men. 

On appeal, Bankers Life's primary argument is that its policy 

covers expenses only for "sickness, injury or mental illness" and 

that a normal pregnancy does not qualify as a sickness or injury. 

It asserts, therefore, that the policy does not discriminate solely 

on the basis of sex; rather, it argues that the determinative 
classification is based on the fact that pregnancy is not a 

"sickness." 

We rejected a similar argument in Mountain States. There, the 

employer argued that normal pregnancy was not a typically covered 

"disease or disabilityM and, therefore, that the Montana Maternity 

Leave Act's protection for women "disabled because of pregnancyn 

did not apply to normal pregnancies. This Court disagreed, and 

affirmed the district court's conclusion that normal pregnancy 

resulted in an "inability to pursue an occupation because of 

physical impairment" and thus was covered by the Act. Mountain 

States, 609 P.2d at 1062. The argument was also rejected in 

Travelers, where the Colorado Supreme Court stated that pregnancy 

is a natural incident of adult life requiring medical attention, 

and the purpose of health insurance is to defray costs of needed 

medical treatment. Travelers, 759 P.2d at 1364. As stated by the 

District Court, pregnancy is a physical condition which requires 

medical attention, regardless of whether it is technically 

classified as a sickness. 

In sum, Bankers Life's major medical insurance policy excludes 

a significant major medical expense for women, a hardship which is 

not imposed on men. Thus, while men are--at least on the face of 

this policy--provided comprehensive coverage for major medical 

expenses, including male-specific conditions, women are not 

provided similar protection. See Quaker Oats Co. v. Cedar Rapids 

Human Rights Commrn (Iowa 1976), 268 N.W.2d 862, 864 and 

Massachusetts Elec., 375 N.E.2d at 1198. We conclude that this 
disparity of treatment is, on its face, sex discrimination in 

violation of 5 49-2-309, MCA. 

Bankers Life also argues that, because its policy is not 

 comprehensive," Travelers and other cited cases are 

distinguishable. This distinction is without import. Section 49- 

2-309, MCA, prohibits gender-based discrimination in insurance 

policies. Regardless of whether Bankers Life's policy is 

technically classified as "cornprehensi~e~~ or "major medical," 

discrimination on the basis of sex is proscribed by statute. In 

any event, if such a distinction exists other than as semantics, 

Bankers Life failed to make a record upon which either the 

commission, the District Court, or this Court could so rule. 

As an alternative approach, Bankers Life contends that 

covering normal pregnancy and childbirth expenses will constitute 

reverse discrimination against men because men will pay premiums 

for benefits that only women receive. We disagree. 

Rejecting a similar argument, the Colorado Supreme Court 

stated that: 

[allthough the risk of one class may not be precisely the 

same as the risks of the other class, an insurance policy 

which provides benefits comprehensively to males and 

females for medical conditions to which each class is 

separately subject cannot be deemed to discriminate 

against either class on the basis of sex. 

Travelers, 759 P.2d at 1364. The same holds true here. The only 

gender specific exclusion in the policy at issue is the pregnancy 

exclusion; no male gender-specific exclusions are listed. Absent 

male gender-specific exclusions in Bankers Life's policy, women are 

paying premiums for benefits only men receive. As noted in Milleri 3 
w, treating pregnancy on an equal basis with other medical 

conditions merely places men and women on more equal terms. 

Miller-Wohl, 692 P.2d at 1254. 

As a final matter, Bankers Life argues that the Montana 

Commissioner of Insurance is required by 5 33-1-502(5), MCA, to 

review all policies for compliance with s 49-2-309, MCA, and 

withdraw approval if a policy violates the unisex insurance 

statute. Bankers Life asserts that, because the Commissioner 

approved the policies at issue, it is entitled to rely on that 

approval. This argument is without merit. 

First, Bankers Life's policies were approved prior to the 

passage of g 33-1-502(5), MCA, by the 1991 Legislature; at the time 

of that approval, the Commissioner had no duty to review the 

policies for violations of § 49-2-309, MCA. We also note that this 

argument is somewhat inconsistent with the following provision in 

Bankers Life's policy: 

Any provision of this policy which, on its effective 

date, is in conflict with the laws of the state in which 

you live on that date is amended to conform to the 

minimum requirement of such laws. 

As set forth above, S 49-2-309, MCA, was enacted in 1983. The 

Charging Parties purchased their Bankers Life policies subsequent 

to October 1, 1985, while the unisex statute was in full force and 

effect. Pursuant to the policies themselves, then, the policies 

were automatically llamendedl' to conform to the requirements of 5 

49-2-309, MCA. Even absent such a provision in the policy itself, 

it is well established that provisions in insurance statutes are to 

be read into an insurance policy as though written therein. Sagan 

13 
v. Prudential Ins. Co. (Mont. 1993), 857 P.2d 719, 721, 50 St-Rep. 

902, 903. 

Bankers Life's policy excludes normal pregnancy and 

childbirth expenses from coverage, thus entitling women to fewer 

benefits in a major medical expense insurance policy because of 

their sex. We conclude that this differential treatment based on 

sex is discriminatory on its face. Therefore, we hold that the 

major medical expense insurance policies purchased by the Charging 

Parties from Bankers Life violate 5 49-2-309, MCA, by unlawfully 

discriminating on the basis of sex. 

We con cur: