(Article from Insurance Law Alert, April 2025)
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Holding
An Illinois district court dismissed a life insurance applicant’s putative class action alleging violations of state privacy laws, ruling that such laws did not apply to life insurance underwriting. Thompson v. Prudential Ins. Co. of Am., 2025 U.S. Dist. LEXIS 61405 (S.D. Ill. Mar. 31, 2025).
Background
Thompson applied for life insurance offered by Prudential. As part of the underwriting process, Prudential required Thompson to undergo a medical examination conducted by a third-party entity. The examination included questions about family medical history as well as a blood test.
In a putative class action suit, Thompson alleged that Prudential’s use of her “sensitive genetic information” for underwriting purposes, including assessment of her eligibility for life insurance, violated the Illinois Genetic Information Privacy Act (“GIPA”). Prudential moved to dismiss the complaint and the court granted the motion.
Decision
The relevant provision of GIPA, Section 20(b), provides that “[a]n insurer shall not use or disclose protected health information that is genetic information for underwriting purposes.” The statute defines “underwriting purposes” to include, among other things, “rules for, or determination of, eligibility (including enrollment and continuing eligibility) for, or determination of, benefits under the plan, coverage, or policy (including changes in deductibles or other cost-sharing mechanisms in return for activities such as completing a health risk assessment or participating in a wellness program).”
The court concluded that Section 20(b) did not apply to life insurance underwriting. The court relied primarily on a recent decision in which another Illinois district court held that life insurers were not subject to GIPA. See Thompson v. Banner Life Ins. Co., 2024 U.S. Dist. LEXIS 138655 (S.D. Ill. Aug. 5, 2024). The Thompson court reasoned that GIPA’s regulation of genetic testing is aimed at accident and health insurance, and that both legislative history and statutory verbiage indicate an intent to exclude life insurers from its application.
Comments
The decision provides important limits on the bounds of GIPA’s protections. The court not only reaffirmed that GIPA does not apply to life insurance underwriting, but also clarified that a life insurance provider, such as Prudential, is not subject to GIPA merely because it offers both life insurance as well as health coverage (which is subject to GIPA). The court stated:
Thompson is asking the undersigned to create an anomalous regulatory scheme where GIPA would exempt the use of genetic information for purposes of life insurance underwriting when the insurer offers only life insurance products but otherwise regulate the same use when the insurer happens to offer health insurance in addition to life insurance. Such a reading contravenes the basic principle of statutory construction that courts must “consider only those constructions of a statute that are ‘fairly possible.’”