Ensuring fair insurance
WOMEN AND men aren't treated equally when it comes to some insurance products. State legislators should fix the inequity.
Terms vary, but a $100,000 annuity can pay a 65-year-old woman $50 less a month than a man of the same age, according to published quotes. Companies justify the difference by arguing that women on average live longer than men.
The US Supreme Court has a fairer interpretation. The court ruled in 1978 and 1983 that gender differences in employment-based retirement plans violate federal civil rights law. The justices concluded that it's unfair to pin group traits on individuals.
This legal reasoning should also apply to companies that sell annuities. To achieve this, Representative Ruth Balser, a Newton Democrat, has filed a bill that would require these sales to be gender-neutral.
The bill is supported by Massachusetts Attorney General Martha Coakley. Last year, her insurance chief, Glenn Kaplan, wrote in a letter to the Legislature: "It is simply not fair that women, who often earn less, must pay more than men for annuities in order to receive the same annuity payments for life."
Passed by the Senate, the bill deserves similar action in the House.
Another bill on a related issue would be a step backward. This bill would release the state-regulated Savings Bank Life Insurance Co. of Massachusetts from gender-neutrality rules. SBLI officials say they need the help so they can compete against companies that don't face such rules, and some women could end up paying lower rates.
But Massachusetts should stay committed to fairness. Lawmakers should pass Balser's bill, and leave the rules for SBLI as is. 