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Californians for Disability Rights, a nonprofit organization based in Oakland, filed a lawsuit July 24 in state court against Bank of America and Provident Life and Accident over an insurance application that it claims is illegal.

The suit charges that some health-related questions in an application for a term policy sold through BOA are discriminatory. CDR accuses the San Francisco-based bank and the Chattannoga, Tenn., insurer with fraudulent and unfair business practices against disabled people.

The suit grows out of a BOA direct mail campaign in May to 3.8 million checking account customers, a CDR spokesperson says. The mailing offered term life insurance to those willing to sign a “Good Health Statement.”

The “fine print” on that statement contains several discriminatory provisions, claims Sidney Wolinsky, head of litigation for CDR.

The form, still in use, identifies Provident Life and Accident as the underwriter. Provident, however, sold that line of business to another carrier two years ago.

The form asks the applicant to certify that he or she has not been treated within the past five years for diseases of the circulatory, respiratory or digestive systems, liver or kidneys, brain or nervous system, or for any cancer, HIV or diabetes.

It does not provide that anyone with a history of such problems could take a medical exam to try to qualify for the insurance, notes Wolinksy. That, he says, is the crux of his lawsuit.

The sweeping nature of exclusions bars nearly all disabled people from buying the insurance, he argues. California law forbids insurers from excluding applicants for life insurance or charging them higher premiums except for reasons based on sound actuarial data, he says.

Some conditions listed in the BOA application, such as for brain disorders, could disqualify people who are blind or hearing impaired, he notes.

“The inability to obtain the financial security provided by life insurance is a major problem for people with disabilities,” he says.

A BOA spokesperson declined to comment on the litigation, saying the bank does not underwrite the insurance.

A Provident spokesperson, noting the insurer no longer sells the product, declined comment.

A spokesperson for the Assurant Group, in Atlanta and Miami, acknowledged taking over the line in August 1999, when it acquired Florida-based American Bankers Life Insurance Company. That company had taken over the BOA-sold life products just three months earlier.

As part of the acquisition, Assurant agreed to reinsure and administer the life policies sold through BOA, its spokesperson says, and continues to sell those policies.

At least for now, however, neither American Bankers nor Assurant Group nor their corporate parent, Fortis Inc., have been named in the suit.

Assurants spokesperson says it strives to comply with the laws of all 50 states where it sells products.

“Were confident were fully compliant with California law,” says Jim Sykes, director of corporate communications for Assurant.


Reproduced from National Underwriter Life & Health/Financial Services Edition, August 6, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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