NU Online News Service, Sept. 15, 2003, 5:48 p.m. EDT — Chicago
State insurance regulators have reviewed 1,600 life insurers throughout the United States for signs of race-based sales and pricing practices, according to Texas Insurance Commissioner Jose Montemayor.
Regulators have conducted the reviews by using surveys and scrutinizing annual statements, Montemayor said here at the fall meeting of the National Association of Insurance Commissioners, Kansas City, Mo.
“We generally believe that we have identified the majority of the cases,” Montemayor said.
So far, regulators have found that about 25 companies and company groups have used race-based underwriting. The number of contracts affected by race-based underwriting at those companies ranges from a handful to thousands, Montemayor said.
Forty examinations are now in progress.
Insurers have adjusted 6 million policies to correct the effects of race-based underwriting, and regulators have imposed a total of $455 million in remediation obligations and $13 million in fines, Montemayor said.
State laws set different standards for how far back a regulator can look in determining if race has been a consideration in underwriting, according to Montemayor. Some states let regulators look back as far as the Reconstruction era, but other states have more recent time limits.
Typically, when regulators examine insurers for race-based underwriting practices, the state of domicile takes the lead, Montemayor reported.