Insurer’s Language Policy Illegal, Lawsuit Says

Consumer advocacy groups filed a class-action lawsuit Wednesday against Northwestern Mutual Life Insurance Co., accusing the Milwaukee-based firm of illegally denying life insurance to people who don’t speak English well.

One of the plaintiffs, Pok Dong Kim of San Francisco, is a Korean American in her 70s who tried unsuccessfully to buy a $10,000 policy to avoid burdening her daughter and son-in-law with burial expenses.

The suit, filed in San Francisco County Superior Court, charges that the company’s English-proficiency requirement violates state and federal laws and “constitutes unlawful arbitrary discrimination and denial of services.”

Under a “longstanding policy,” spokesman Tom Towers said, Northwestern does not accept life insurance applications from people who are not proficient in English, unless they apply through a special agency with “certified bilingual capacity.” He said he does not know how many such agencies Northwestern has certified in California.

The policy is meant to protect consumers from buying inappropriate products or being misled by agents, Towers said. But it also protects the company when people provide inaccurate information about their medical histories, for example, and later say they misunderstood the questions, he said.

Towers said the policy is under review. “This is clearly an area where we’ve been making changes--before the lawsuit,” he said.

The Latino Chamber of Commerce of Compton joined the lawsuit, saying that Northwestern’s policy could be a barrier to Latino business people, many of whom have little or no knowledge of English.

Northwestern, California’s sixth-largest life insurer, had 213,031 policies outstanding in the state at the end of 1993, according to the state Insurance Department.