NU Online News Service, May 3, 12:17 p.m. – Unitrin Inc., Chicago, has agreed to pay at least $33 million in cash and benefits to settle a suit filed over subsidiaries’ past use of race in underwriting and pricing life insurance policies.
Lawyers filed the suit on behalf of past and current policyholders of the subsidiary companies, and those policyholders’ heirs and beneficiaries, in a state court in Alabama. The settlement is still subject to approval by the state court, Unitrin says.
Unitrin has also negotiated an agreement with state insurance regulators to provide $1 million in additional cash relief for some policyholders and pay a fine of $1.25 million to the state regulators, the company says.
The subsidiaries covered by the settlement and the regulatory agreement are United Insurance Company of America, The Reliable Life Insurance Company and Union National Life Insurance Company.
The subsidiaries charged higher rates for African American customers many decades ago, at a time when actuarial tables showed African Americans had a lower average life expectancy than other Americans, Unitrin says.