provisions of this legislation should affect the way the insurance industry does business in accordance with the State laws and regulations under which it is regulated ... Since there is some uncertainty over the possible interpretations of the language contained in titles 1, 11, and III as it applies to insurance, the Committee added section 501(c) [ 42 U.S.C. § 12201(c)] to make it clear that this legislation will not disrupt the current nature of insurance underwriting or the current regulatory structure . . . ." A & P S. Rep. 101-116, at 84.
Therefore, this Court holds that Title III of the ADA was not intended to reach the underwriting practices of insurance companies. If, however, the "safe harbor" provision was used as a subterfuge to elude the purposes of the ADA, then an exception may arise.
See Parker, 121 F.3d at 1014 n.7; Title III Technical Assistance Manual - Covering Public Accommodations and Commercial Facilities (1993) ("Insurance offices are places of public accommodation, and, as such, may not discriminate on the basis of disability in the sale of insurance contracts . . . An insurer . . . may underwrite, classify, or administer risks. . . provided that such practices are not used to evade the purposes of the ADA.").
B. The Denial of Coverage
While Title III of the ADA does not ordinarily apply to the underwriting practices of insurance companies, an individual may not be denied insurance coverage based on a disability unless such denial is based upon sound risk classification. See H.R. Rep. No. 485, 101st Cong., 2d Sess., pt. 2, at 137, at 70, reprinted in 1990 U.S.C.C.A.N. at 420, 494 (stating that "plan may not refuse to insure . . . an individual . . . solely because of a physical or mental impairment, except where the refusal . . . is based on sound actuarial principles . . . For example, a blind person may not be denied coverage based on blindness independent of actuarial risk classification.").
In the instant case, the Plaintiffs have alleged they were denied the joint insurance policy because of their mental illnesses. However, they have not alleged facts from which the Court can draw a favorable inference that the denial might not have been based on sound actuarial principles or that their combined mental illnesses did not pose increased risks. Two individuals who suffer from major depression, agoraphobia, and borderline personality disorder would under traditional risk classification and common sense have a significantly higher risk classification than two individuals who do not have a disability or even individuals who have a different type of disability.
See Aguilar v . United States Life Ins. Co., 162 A.D.2d 209, 556 N.Y.S.2d 584, 585 (1st Dep't 1990) (recounting testimony by the chief underwriter for an insurance company that had the company been "aware of the true and accurate medical history of [the decedent], which included mild to moderate depression" the insurance policies would never, "without equivocation," been issued). Furthermore, the Plaintiffs have failed to provide factual support for their contention that the Defendant used the "safe harbor" provision as a subterfuge.
All of Plaintiffs' allegations which support a claim under Title III of the ADA are mere conclusory allegations devoid of any factual basis. The Court finds that the Plaintiffs have not stated a claim upon which relief can be granted and, therefore, the Defendant's Rule 12(b)(6) motion on the ADA claim is granted. Additionally, the Court refuses to exercise its supplemental jurisdiction over the state claims.
After reviewing the entire file in this matter, the submissions of the parties, and the applicable law, it is hereby
ORDERED that the Defendant's motion to dismiss for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6) is GRANTED and the complaint is dismissed.
IT IS SO ORDERED.
Dated: March 24, 1998
Syracuse, New York
Frederick J. Scullin, Jr.
United States District Court Judge