An Illinois appeals court dismissed a proposed class action accusing State Farm Life Insurance Co. of violating the state’s genetic information privacy statute through its life insurance underwriting process.
The case turned on how Illinois law defines genetic information, personal health information, and who the underwriting restrictions actually apply to.
The lawsuit came from a policyholder who argued State Farm crossed a legal line by requiring a physical exam and genetic-related health data before issuing a life insurance policy.
The plaintiff claimed this practice violated the Illinois Genetic Information Privacy Act, which bars insurers from using or disclosing protected health information that includes genetic data for underwriting.
State Farm took a narrower view. The company argued that the underwriting restrictions in the statute apply only to health insurers, not life insurers. The Appellate Court of Illinois, Second District, agreed.
The court acknowledged that the information collected during underwriting qualified as genetic information under the statute. That wasn’t enough.
To trigger the law’s protections, the data also had to meet the definition of personal health information, which the act borrows directly from federal Health Insurance Portability and Accountability Act standards.
Under HIPAA, personal health information must be individually identifiable and created or received by a health care provider, health plan, employer, or health care clearinghouse. The plaintiffs never alleged State Farm fit into any of those categories.
They also failed to show that ExamOne, the third party that collected the underwriting data, qualified as a health care provider under HIPAA.
Without that link, the court said, State Farm never possessed protected health information as defined by law.
The plaintiffs pushed a broader interpretation. They argued the statute’s opening language applies to all insurers because it does not explicitly exclude life insurance, and that underwriting restrictions appear later in the law without clear limits.
The court rejected that reading. The subsection governing underwriting uses language rooted in health insurance terminology and contains no references that connect it to life insurance.
The judges also noted that later amendments to the statute aligned it with federal regulations that apply only to health insurers.
The opinion conceded the law could be drafted more clearly. Still, taken as a whole, its structure, surrounding language, and legislative history showed lawmakers intended the underwriting ban to apply to health insurers alone.
State Farm welcomed the ruling. A company spokesperson said the court’s decision correctly reflected the law.
The American Council of Life Insurers supported State Farm’s position through an amicus brief. The trade group said multiple lawsuits have tried to stretch the genetic privacy statute to challenge long-standing life insurance underwriting practices.
According to the ACLI, this case appears to be the first time an Illinois appellate court addressed that theory directly.
The group defended the use of medical and family health history in life underwriting, calling it fundamental to risk assessment and the ability to pay claims over time.
According to Beinsure analysts, the decision reinforces that position.
Had the court accepted the plaintiffs’ interpretation, the ACLI warned, it would have disrupted a core underwriting tool and overturned centuries of Illinois precedent recognizing the role of medical history in life insurance. The appeals court wasn’t willing to go there.
