US Congress takes aim at the travel insurance industry

The US House of Representatives is targeting the travel insurance industry in response to reports of travel insurance companies refusing to cover trips canceled due to coronavirus (COVID-19). On March 4, 2020, three insurance firms received Congressional inquiry letters from Raja Krishnamoorthi, the Chairman of the US House Committee on Oversight and Reform, Subcommittee on Economic and Consumer Policy.

The Chairman invited each firm's CEO to testify before the Subcommittee to "explain publicly why [their] company may deny coverage for those who choose not to travel because of the coronavirus." The letters declared that the Subcommittee "is concerned that your policy to deny indemnification to your consumers who choose to refrain from travel to protect themselves, their families and their communities may worsen the coronavirus pandemic." The three insurance firms declined the invitation to testify, and the Subcommittee hearing, which had been scheduled for March 11, 2020, was postponed.

Asserting that "Companies should not be profiteering off this crisis," Chairman Krishnamoorthi sent a second round of letters to the three insurance firms on March 18, 2020. The Subcommittee is now seeking extensive information and documents relating to reimbursement claims submitted in connection with COVID-19 for both trip cancellations and medical expenses, as well as various sales data, including the percentage of sales from bookings and airline websites. Giving the companies only one week to comply, the letters also requested the respective CEOs appear for a transcribed interview.

Chairman Krishnamoorthi has promised to go forward on the currently-postponed hearing, declaring on his website: "If they are taking advantage of American consumers, travel insurance companies must be held accountable for it." The House of Representatives is scheduled to return from its recess on April 20, 2020. Congressional investigations invariably grow in scope and we expect that any significant actor in this space faces the risk of being drawn into future hearings and demands.

Norton Rose Fulbright has extensive experience with such inquiries. Our attorneys have great familiarity with Capitol Hill and can provide valuable guidance and advice in responding to, or avoiding, legislative investigations. Samuel Ramer handled Congressional inquiries at the White House as Senior Associate Counsel to President Trump, and served as Senior Counsel for both the Senate and House of Representatives Judiciary Committee. He was also the Justice Department's main legislative strategist and point of contact to Congress as the Acting Assistant Attorney General for Legislative Affairs. Keith Rosen served as Chief of the Criminal Division for the US Attorney's Office for the District of Delaware, and has broad experience advising and defending companies (both in the US and overseas), as well as their officers and directors, on a broad range of civil, criminal, Congressional, and regulatory matters.