Next year, AAIS will withdraw several mandatory endorsements it filed in Connecticut and New Hampshire just a few years earlier.
The endorsements amended policies so that same-sex partners in a civil union would have the same coverage as spouses in a traditional marriage, but the endorsements will no longer be needed.
Connecticut legalized same-sex marriage in 2008 and has eliminated its civil unions statute as of Oct. 1, 2010. Civil unions in effect on that date will automatically become marriages, leaving no need to modify policies that refer to spouses.
New Hampshire has taken similar action, and its civil unions will come to an end on
Jan. 1, 2011.
It’s easy enough for AAIS and other organizations to withdraw an endorsement, but there are fees involved. The cost and effort to make and withdraw filings could grow substantially as more and more states establish legal forms of personal unions other than traditional marriage, and as some move to grant legal recognition to same-sex marriages.
There is a bigger question than that of administrative costs, however. One can reasonably ask whether such endorsements are fully sufficient to guarantee spouse-like coverage to partners in civil unions and domestic partnerships.
About 10-15 years ago, civil unions and domestic partnerships were viewed by many people as a humane compromise that would allow people of the same sex to form personal unions without directly challenging the unique status of marriage.
Indeed, some of the states that established legal unions for same-sex couples also enacted “defense of marriage” laws defining marriage as the union of a man and a woman.
Originally, eligibility for civil unions and domestic partnerships was restricted to same-sex partners age 18 or older who were not blood relations as defined by law.
In Maine, however, opposite sex couples are also allowed to register as domestic partners, who have some but not all of the rights of spouses in that state.
More recently, California, New Jersey, and Washington have allowed opposite-sex couples to form domestic partnerships if at least one of the partners is age 62 or older.
This new trend in non-marital partnerships allows widows and widowers to form new unions without losing Social Security benefits accrued by their deceased spouses; such benefits would terminate for the surviving spouse if he or she remarried.
States that grant legal recognition to same-sex civil unions and domestic partnerships require property/casualty insurers to grant partners in such unions the same coverage as spouses in a traditional marriage.
As of today, AAIS has endorsements filed in eight states to extend coverage to partners in a legally recognized civil union or domestic partnership. Those states are: California, Connecticut, Nevada, New Hampshire, New Jersey, Oregon, Vermont, and Washington.
In addition, Hawaii and Vermont allow same- or opposite-sex partners who are blood relations to register as “reciprocal beneficiaries;” Rhode Island is considering a bill to legalize reciprocal beneficiary agreements.
Under such agreement, beneficiaries have certain rights of spouses and dependents, such as hospital visitation rights and health insurance eligibility.
As with marriages and civil unions, reciprocal beneficiary arrangements must be exclusive. One cannot be married or in a civil union and become a reciprocal beneficiary of someone, and one may not enter into more than one reciprocal beneficiary agreement.
To date, insurers are not required to recognize reciprocal beneficiaries as having the same coverage as spouses under P/C policies.
Still, the vast majority of states recognize no form of personal union other than traditional marriage, and it is far from certain that they ever will. Moreover, the federal Defense of Marriage Act explicitly restricts federal benefits and tax preferences to traditional spouses.
“A marriage between a heterosexual couple is portable, meaning that it is recognized in all 50 states,” reads the website of Irene Olszewski, a Connecticut attorney whose firm specializes in same-sex marriage and civil unions.
“A heterosexual couple is considered married no matter where they travel or relocate,” she writes. “Heterosexual marriages can be dissolved in any state.
“By contrast,” she adds, “a same-sex couple is not considered legally married in those states that do not recognize same-sex-marriage, [and] same-sex marriages can only be dissolved in states that recognize such marriages.”
The same could be said for civil unions and domestic partnerships.
“Domestic partnership status does not work as a model for America,” writes “Demian,” director of the Seattle-based Partners Task Force for Gay & Lesbian Couples, in a June 2009 posting on the task force website. “Because of the lack of portability, they create a patchwork legal status as a couple moves or vacations.”
Does that legal “patchwork” affect exposure under P/C policies?
Admittedly, one has to scavenge the imagination to think of scenarios when coverage provided for a spouse would not be provided for a legalized same-sex partner under a policy amended to extend such coverage. Carriers have committed to provide such coverage, no matter how individual states regard same-sex unions.
It is virtually impossible to imagine an auto liability insurer evading its obligation to pay a claim arising from a same-sex partner involved in an accident in a state that does not recognize same-sex unions.
Even if a carrier tried to argue that enforcing the contract was against public policy in the state, coverage would be triggered by the condition that a permitted user of the insured auto is automatically insured under a standard auto policy. The nature of his or her relationship to the insured would be irrelevant.
It’s almost as difficult to imagine any court failing to enforce liability coverage under a homeowners or personal umbrella policy for non-auto liability, given the heavy bias in the law to compensating third parties.
Still, if the carrier balked at providing a defense, the defendant partner might not get any help from the trial court in enforcing the insurance contract, if doing so would seem to conflict with public policy. The defendant would have to take the insurer to court in the state where the policy was issued, where presumably the union is recognized.
Matters could become more complicated under commercial and farm policies, where coverage can extend, or be expected to extend, to complex arrangements and enterprises that can cross state lines.
As is standard in the industry, the AAIS Artisans, Businessowners, and Commercial Umbrella forms each extend coverage to the spouses of the named insured and its partners and members (if the named insured is a partnership or membership), but only with respect to the conduct of the insured enterprise.
Given that, suppose someone in a legal same-sex union in New Jersey holds an ownership stake in a Pennsylvania business partnership. Under a policy issued in New York, that person would not be entitled to have the same automatic coverage for his or her personal partner as traditionally married investors would have for their spouses.
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A reviewer asked why the main article for this topic did not have more discussion of the growing number of states recognizing same-sex marriages.
The answer is simple: As hot as that topic may be in social and political discourse, same-sex marriage requires no change in standardized forms. A same-sex spouse simply becomes a “spouse” under the terms of a policy; no filing action is required.
As of press time, six states had authorized same-sex marriages to be performed: Connecticut, Iowa, Maine, Massachusetts, New Hampshire, and Vermont.
The District of Columbia and New York recognize same-sex marriages performed under law in other states, but do not authorize them to be performed in their own jurisdictions. Similarly, Rhode Island recognizes same-sex marriages performed in Massachusetts, but does not perform them.
Same-sex marriages performed in California between June and November of 2008 continue to be recognized, but no new same-sex marriages are being performed following the November 2008 ballot initiative reserving marriage to opposite sex couples.
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The same would be true if the insured partnership was a farm covered under the AAIS Farmowners farm commercial liability form, which treats the spouses of business partners in a manner similar to commercial lines forms. That form, however, as with the AAIS farm personal liability form, automatically provides liability coverage for personal activities to a resident spouse and members of the insured’s household, if the declared insured is an individual.
The new AAIS Agricultural General Liability Program (AgGL) adopts a commercial lines approach, in that any insured, including the spouses of the named insured and/or partners and members, is covered only with respect to the declared enterprise. Personal liability coverage can be added by endorsement, but is not automatically provided in the base form.
AAIS Farm Umbrella policies extend coverage to “all persons and entities covered by underlying insurance.”
Since “spouse” is not traditionally a defined term under P/C policies, one can see how disputes can arise.
A same-sex partner in a legally recognized union in one state will believe that he or she has a spouse for the purposes of the law, and will argue that his or her partner has rights to spousal coverage in another state, no matter what its position on same-sex unions, because there’s nothing in the policy that expressly denies it.
Carriers could amend policies on their own to provide spousal coverage to partners in unions other than traditional marriage, “but doing so would be challenging,” says Deborah Summerlin, AAIS vice president of insurance lines.
In the first place, some traditional states might reject such a filing as being against public policy.
Even if a voluntary filing were accepted, Summerlin asks: “If state law is silent with respect to legally recognized domestic partnerships, how does the insurer determine the validity of the arrangement?
“The insurer would have to develop its own criteria and include that in policy language.”
The criteria for that language would be inherently subjective, Summerlin says, which is a primary reason AAIS has not developed a generic civil union/domestic partnership endorsement.
Such an endorsement would nonetheless be “doable,” she says, if there was sufficient demand from companies for it.
However, there’s another hurdle to filing a generic countrywide domestic partner endorsement.
According to Summerlin, AAIS would have to explain the need for such a filing “when there are already mechanisms for insuring the interests of unrelated partners by simply showing their names on the declarations or an existing endorsement.”
“When property is jointly owned, I believe it is best to issue the policy in the name of both owners,” Summerlin says.
Summerlin’s advice echoes that given by the National Association of Insurance Commissioners (NAIC). On its website, the NAIC recommends that domestic partners list both of their names on auto and homeowners policies.
Also, if one partner is the owner of a home, the NAIC recommends that the other should purchase renter’s insurance, unless the latter can obtain protection for personal property and personal liability by endorsement to the former’s homeowners policy. (AAIS provides such an endorsement.)
In other words, the NAIC advises partners in same-sex unions to be insured as individuals for property/casualty exposures.
Until the legal standing of non-traditional personal unions is secured through at least most of the country, it is hard to argue with such advice.
Given the growing variety of non-traditional unions, insurers--if they have a choice--will probably be much more disposed to insuring household residents as identifiable individuals, rather than extending automatic coverage to different types of partners.
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Marriage, and more 
