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Court’s Ruling on Gay Marriage Has Insurance Implications

Some insurance benefits that were available only to man-woman married couples are now open to same-sex couples as a result of last Wednesday’s U.S. Supreme Court decision to strike down the Defense of Marriage Act...
July 3, 2013

Some insurance benefits that were available only to man-woman married couples are now open to same-sex couples as a result of last Wednesday’s U.S. Supreme Court decision to strike down the Defense of Marriage Act. But the full picture remains a bit murky.

The property-casualty industry of auto and home insurers isn’t affected by the ruling, said Robert Hartwig, an economist and president of the Insurance Information Institute (I.I.I.), which is a property-casualty research entity funded by insurers. “Sexual orientation is not an underwriting factor and insurers have long since, for many many years, issued policies to couples that are same-sex, opposite-sex, to people that are roommates, to inter-generational relationships and this will continue,” Hartwig said.

However, life and health insurance could be simplified by the ruling. The ruling removes a conflict between federal tax law and state laws in states where same-sex marriage is legal, said Jack Dolan, a spokesman for the American Council of Life Insurers (ACLI). The conflicting state and federal laws recognized same-sex couples as spouses in annuity contracts, but it did not provide those spouses with the same federal tax benefits that go along with being a spouse, Dolan said. The ruling “removes this conflict and clarifies a number of issues in states where same-sex marriage is legal. ... [it] allows life insurers to recognize marriages of same-sex couples in administering their retirement plans and other insurance contracts in those states.”

The effect of the ruling in states that do not recognize same-sex marriage is less clear. For example, if a couple is legally married in one of the 12 states and D.C. that has gay marriage, will health insurance benefits apply if they move to a state that doesn’t allow gay marriage? An analysis of the insurance aspects of the Supreme Court’s decision is published in the Hartford Courant.

What It Means to Agents: The Supreme Court’s decision could open up additional insurance marketing opportunities in the 12 states and D.C. where same-sex marriage is now fully legal: California, Connecticut, Delaware, Iowa, Maine, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, Vermont, Washington and the District of Columbia.

Insurance Implications of High Court Ruling (Hartford Courant 6/26/13)

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