November 16, 1999
The Honorable Joseph I. Lieberman
United States Senate
Washington, D.C. 20510-0703
Dear Senator Lieberman:
This is in response to your inquiry on behalf of your constituent, xxx xxxxxxx xxxxxx of Groton, Connecticut.
xxx xxxxxx has requested information on the application of the Americans with Disabilities Act of 1990 (ADA) to the insurance industry.
xxx xxxxxx wrote that he has been denied an insurance policy to pay off the mortgage on his house in the event that he dies before the mortgage is paid off, because he has a congenital heart defect.
Title III of the ADA prohibits discrimination on the basis of disability by places of public accommodation, including service establishments such as insurance companies. Because of the nature of the insurance business, however, consideration of disability in the sale of insurance contracts does not always constitute unlawful "discrimination." An insurer or other public accommodation may underwrite, classify, or administer risks that are based on or not inconsistent with state law, provided that such practices are not used as a subterfuge to evade the purposes of the ADA.
With respect to the purchase of insurance, the ADA allows insurance companies to refuse to insure someone with a disability only if the refusal to provide coverage is based on sound actuarial principles, or actual or reasonably anticipated experience. The ADA, therefore, does not prohibit the use of legitimate actuarial considerations to justify differential treatment of individuals with disabilities in insurance.
Enclosed for your information is a copy of the Department of Justice's Technical Assistance Manual for title III of the ADA. It discusses the definition of disability on pages 9 to 13, and the requirements applicable to insurance companies on pages 19 to 20.
I hope that this information is useful to you in responding to your constituent. Please do not hesitate to contact the Department if we can be of assistance in other matters.
Bill Lann Lee
Civil Rights Division