NU Online News Service, Feb. 20, 4:10 p.m. – Life Insurance Company of Georgia and Southland Life Insurance Company, both in Atlanta, have agreed to settle claims they once charged race-based premiums to millions of minority customers, according to Georgia Insurance Commissioner John Oxendine.
The settlement calls for Life Insurance Company of Georgia and Southland Life Insurance Company, both of which are now subsidiaries of the ING Groep N.V., Amsterdam, to provide $51 million in relief to minority policyholders around the country.
The settlement follows an examination ordered by the commissioner after allegations emerged that the company historically charged African-Americans higher premiums than whites for similar or identical life insurance coverage.
Some 2.5 million policyholders nationwide will be affected by the settlement, including some 677,000 in Georgia, Oxendine says.
The final value of the settlement may increase if additional policyholders are located after relief is actually granted to policyholders, Oxendine says.
The companies will also pay an additional $4 million fine to be distributed among the states, of which Georgia’s portion is expected to exceed $1.1 million, Oxendine says.
Georgia conducted the examination on behalf of all the states with affected policyholders, but all those states must agree to the terms of the settlement for it to become effective, Oxendine says.
Those affected by the settlement include certain non-white policyholders or their beneficiaries who purchased “substandard” Industrial Life and President’s Thrift Series policies sold by Life of Georgia; holders of “upside down” policies (policies in which premiums paid exceed the face amount) sold by Life of Georgia; and those who had “substandard” Industrial Life policies written by companies acquired by Southland.
A popular insurance product in the 1960s, industrial life policies were marketed mainly to low-income individuals who bought them to cover funeral expenses in the event of their death.