A multi-state effort including California, Georgia, Florida, Ohio and Texas, has resulted in a settlement with Americo Life Inc. to secure benefits for African-American consumers historically sold insurance policies using discriminatory practices. According to the California Department of Insurance, Americo’s acquiried companies charged or collected higher premiums for life insurance products based upon race; limited the amount, extent or type of coverage available by race; and, assigned risk classifications based on race.
Although the affected policies were not sold directly by Americo, they were sold by insurance companies Americo subsequently acquired (see Web link below). The settlement applies to policies issued by the companies from 1928 to 1960 and were active, live policies after Dec. 31, 1959. Possible victims, including heirs and beneficiaries, have four years to make a claim.
The settlement affects small face-amount life insurance policies, commonly known as industrial life or burial policies. For each person who is identified as a holder of an eligible policy, the company will add 25 percent to the face amount of the policy. In addition, policies that terminated by cash surrender, death or endowment will receive a payment calculated at four percent per annum from the date of termination until the present.
The Texas Department of Insurance (TDI) was the lead regulatory negotiator for the five states that acted on behalf of all the members of the National Association of Insurance Commissioners. TDI’s Race-Based Pricing Web Resource Page includes information on current and past settlements, a list of insurance companies involved in race-based pricing, and online claim forms and complaint forms. It can be accessed at: www.tdi.state.tx.us/consumer/rbsettlement.html.
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