[SeMissourian.com] Fair ~ 43°F  
River stage: 15.52 ft. Rising
Thursday, Dec. 25, 2014

Georgia insurer settling race-bias suit

Thursday, January 10, 2002

A Georgia insurance company will pay more than $45 million to settle a lawsuit accusing it of charging blacks higher premiums for decades, a source close to the negotiations said Wednesday.

Life Insurance Co. of Georgia said only that it expects a settlement of the federal class-action suit "in the very near future."

The case stems from a Georgia investigation that found that Life of Georgia had charged blacks up to 35 percent more than whites for the same or similar coverage in the 1950s, '60s and '70s.

The policies were primarily sold door-to-door in the South to poor blacks, often to cover burial expenses. The policies usually paid out no more than several hundred dollars.

Under the settlement, the company will pay $45 million to $60 million, almost all of it in restitution to black policyholders, a source told The Associated Press on condition of anonymity. Payments could go to holders of up to 3 million policies.

At Life of Georgia, all nonwhites were lumped into a "substandard" category, said Georgia Insurance Commissioner John Oxendine, who is negotiating on behalf of regulators from more than 40 states.

After 1960, the company continued discriminating by targeting the policies at people in certain neighborhoods and occupations, such as maids and shoeshiners, he said.

The settlement would be the latest in a series by insurance companies accused of overcharging black and poor policyholders.


Fact Check
See inaccurate information in this story?


Respond to this story

Posting a comment requires free registration. If you already have an account on seMissourian.com or semoball.com, enter your username and password below. Otherwise, click here to register.

Username:

Password:  (Forgot your password?)

Your comments:
Please be respectful of others and try to stay on topic.