Some 25,000 minority North Carolinians victimized by race-based premiums could benefit from a settlement agreed upon by Western and Southern Life Insurance Co. and the North Carolina Department of Insurance. The company was accused of using race-based premiums in the sale of life insurance to African Americans during the 1950s, ’60s and ’70s.
Insurance Commissioner Jim Long said those who fell victim to this practice may be eligible for benefits as part of this settlement. He encouraged citizens to take steps to determine their eligibility.
Western and Southern Life Insurance Company, based in Cincinnati, came under scrutiny as a result of a multi-state examination led by the Ohio Department of Insurance with assistance from North Carolina, Illinois, Indiana and Michigan.
The examination focused on the sale of life insurance, also sold as industrial life insurance or monthly debit ordinary insurance, by Western and Southern Life and eight companies it acquired. The examination found these policies were marketed to African Americans who were then charged higher premiums based on their race. Such race-based underwriting was outlawed in North Carolina in 1989.
In 1988 and again in 2000 and 2001, the company voluntarily implemented an extensive internal program to identify in-force policies that may have been priced on a racially distinct basis. The company identified approximately 25,000 policies in North Carolina that may have been affected, and states that all eligible in-force policies were adjusted by February.
Under the terms of the settlement, those who may be eligible could receive benefits in the form of a $25 regulatory enhancement and increased policy benefits. The majority of the affected policies in North Carolina were issued by the former Imperial Life of Asheville and by American Life of Baltimore.
Settlement notifications were mailed to eligible policyholders and beneficiaries in early June 2006 at the last known address of record on the company’s electronic data base. In order to receive benefits, claim forms must be received in the company’s office no later than July 1, 2007. Commissioner Long urges citizens to contact the company immediately if they did not receive a settlement notification but believe they or a family member may be affected by this settlement. To learn more about this settlement, consumers can call the company toll free at (877) 874-7563.
Source: North Carolina Department of Insurance
Topics North Carolina
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