The American Council of Life Insurance, the principal trade association of the life insurance industry, has decided to withdraw its opposition to legislation that bans sex discrimination in insurance rates and benefits, provided that the overhaul of the industry's rating structure is not retroactive.
The shift in the industry's opposition to such legislation came to light Monday at a news conference highlighting the reintroduction of the Economic Equity Act. This is an omnibus bill that contains numerous provisions that would improve the treatment of women in pensions, tax policy and insurance, government regulations, child support and alimony enforcement.
Its provisions banning the use of sex-based actuarial tables for determining insurance premiums and benefits triggered strong opposition from the industry, which has justified paying women less in monthly pension benefits, for example, on the grounds that women as a group live longer than men. The ACLI estimated that if Congress required complete retroactivity in equalizing pension benefits, it would cost the industry $2 billion. According to a Labor Department estimate, the industry had assets and reserves in 1981 totalling $560 billion.
The ACLI intends to propose a less costly implementation plan that would involve merging the actuarial rate and benefit tables of men and women and applying the new rates only to premiums and benefits paid after the law goes into effect.
This would mean that women who are currently retired, for example, would see no increase in their pension checks as a result of the EEA, nor would working people whose pensions are determined by premiums paid before the law went into effect.
Backers of the legislation view improvement of pension benefits for women who are now retired or about to retire as an important way of relieving part of the poverty problem among older women. The industry's opposition to retroactivity is likely to prove a sticking point. Nonetheless, the industry's shift on the important principle of sex-based tables, which are used in determining all types of insurance, ranging from auto to disability to pensions, is a major victory for the coalition that is backing the act.
The EEA is the brainchild of Sen. David Durenberger (R-Minn.), who began working on an omnibus economic package for women in 1980. Oregon Republican Sens. Robert Packwood and Mark Hatfield have joined as chief cosponsors of EEA. Democratic presidential candidate Sen. Gary Hart was also at Monday's news conference, stressing the bipartisan support that the act has in Congress. A companion bill has been introduced in the House where it is being backed by the Congressional Caucus on Women's Issues. The Reagan administration has taken no position on it.
The EEA has the support of major women's organizations and the Leadership Conference on Civil Rights, which represents 165 national organizations of blacks, Asian-Americans, Hispanics, labor, women, disabled citizens, senior citizens and religious organizations. Ralph Neas, its executive director, previously worked for Durenberger and helped draft the EEA. Minor portions of the act were passed in the last session when it was not a legislative priority. Several developments have occurred since then.
In January, the leadership conference voted to make EEA's passage a priority this session. It plans to use the same lobbying strategy that it used on the Voting Rights Act, during which this coalition of traditional civil rights groups and women's organizations first surfaced.
And this lobbying effort will come at a time when politicians are keenly aware of the women's vote that showed up in the last elections. "People are very anxious because of the political realities to get out in front on this particular kind of legislation," said Neas.
Those political realities clearly played a role in the ACLI decision. The industry's key players haven't folded their cards, but they are ready to go to the bargaining table. "We see something coming down the pike and we have very little choice," said spokesman Walter Bussewitz yesterday. "We have some thoughts as to how to make this thing livable."
The industry's action is a good sign that an enormously complicated issue will be addressed with legislation that is financially sound as well as socially equitable. And it is a positive sign that the Economic Equity Act will become a major legislative trophy for the women's vote.