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May 03, 2002 at 08:00 PM
NU Online News Service, May 3, 3:51 p.m. – Texas residents will be getting about $4.9 million in settlement benefits and payments from Unitrin Inc., Chicago, according to the Texas Department of Insurance.
The department estimates that 72,800 state residents will share in the national settlement, and that another 14,000 could participate if they meet certain eligibility requirements, the Texas department says.
If the Texas department estimates prove to be accurate, each affected resident will get an average of about $56 in settlement proceeds.
The proposed settlement, announced Thursday, would resolve a class-action lawsuit file in a state court in Alabama. The plaintiffs contend that three life insurance companies owned by Unitrin used race-based policies when underwriting and pricing life insurance policies sold many years ago.
Beneficiaries of the agreement include Hispanics as well as African-Americans.
The three Unitrin subsidiaries affected are Union National Life Insurance Company, Baton Rouge, La.; United Insurance Company of America, Chicago; and Reliable Life Insurance Company, Webster Groves, Mo.
Unitrin has agreed to pay at least $33 million to current and former customers, their beneficiaries and their heirs.
Unitrin also reached a separate agreement with regulators that calls for it to pay $1 million more to consumers and a $1.25 million fine.
In addition to resolving the race-based pricing allegations, the regulatory settlement resolves allegations that the subsidiaries failed to pay some beneficiaries all death benefits due when there were multiple life insurance policies on a single individual.
