NU Online News Service, June 12, 2003, 5:17 p.m. EDT – Monumental Life Insurance Company, Baltimore, says it has agreed to give $35 million in extra benefits to 400,000 current policyholders and 100,000 past beneficiaries to resolve regulators’ concerns about policies that may have been issued with rates based on race.
Monumental emphasizes in a statement about the settlement that it discovered the potential problems itself and that it was responsible for bringing the findings to the attention of regulators in Maryland and other states.
“Monumental Life has never issued policies with race-distinct premiums,” the company says in the statement.
But, during the 1990s, through acquisitions, Monumental assumed responsibility for about 5 million policies issued by more than 240 companies, the company says.
Monumental began auditing the policies issued by the other companies in 2000 and “found evidence of situations where policies were likely to have been priced differently based upon, among other things, race,” the company says.
Most of the policies involved were issued before 1965, the company says.
Monumental itself told regulators about the findings, the company says.
“Over the last two and a half years, [Monumental Life] has worked diligently with state regulators to identify plans of insurance eligible for increased death benefits and has fully cooperated with a multi-state market conduct examination,” the company says.
Monumental says it is responding to the findings about race-based pricing by increasing death benefits for holders of 400,000 in-force policies and making additional death benefit payments on more than 100,000 claims paid since July 1, 1974.
The policy face amounts average from $200 to $500, and the benefit increases will average about $72 per policy, Monumental says.
Monumental also will set aside $2 million to be used for contributions to charities serving African-Americans, or as directed by state regulators, the company says.
Monumental has set up a toll-free customer service line at 877-216-0949 to handle questions about the affected policies.