Big Settlement Urged for Insurance Bias
A group of consumer and minority activists are calling on life insurers nationwide to agree to a multibillion-dollar settlement to avoid protracted lawsuits about race discrimination.
Insurers that charged African Americans more than whites for policies--a practice that was common well into the 1960s--should make amends in a huge, global settlement like that reached for Holocaust victims, said Robert Gnaizda, head of San Francisco-based the Greenlining Institute. The institute is a consumer advocacy group that is sponsoring a hearing on the issue today at West Angeles Church of God in Christ in Los Angeles.
The hearing--which organizers are touting as the first of its kind--follows nearly a year of investigation by state insurance commissioners into race-based discrimination by insurers. Gnaizda said the meeting was designed to publicize victims’ plights and promote the idea of a global settlement.
German life insurers agreed to a $5-billion settlement last year to resolve claims by survivors of Nazi enslavement and forced labor.
Some U.S. life insurers have already agreed to settlements about race-based premiums. The Florida Department of Insurance last year negotiated a $206-million settlement with American General Life & Accident Insurance Co. The agreement covered 4.9 million race-based policies, according to the National Assn. of Insurance Commissioners, which has been investigating the issue.
American General also agreed to a $7.5-million fine, and voluntarily contributed an additional $2 million to the National Assn. for the Advancement of Colored People, the NAIC said.
Other insurers have denied wrongdoing or said they have corrected the problems of the past.
But activists say discrimination continues because some insurers still have old policies on their books that continue to offer lower benefits to minorities.
All 50 state insurance commissioners agreed last June to investigate the practices of insurers based in their states. Since then, California has surveyed its insurers to identify companies that might have discriminated against minorities but has not released the results of that survey.
State Insurance Commissioner Harry Low is scheduled to speak at today’s hearing, which begins at 10 a.m., and which is to include testimony by people who say they were victimized by insurers.
