Pennsylvania Insurance Commis-sioner M. Diane Koken announced in July that the Insu-rance Department has signed a settlement order against Illinois-based Unitrin Insurance Group for selling life insurance policies using race-based pricing."As a result of our action, as many as 5,200 beneficiaries and policyholders in Pennsylvania now are eligible to receive their share of $462,000 in settlement benefits,"
Koken said. "In addition, the company will be paying a regulatory fine," she said.
"We took this action to see that insurance consumers in Pennsylvania are treated fairly and respectfully. This is just one more step in the process of correcting any unfair and discriminatory practices."
Burial insurance
Known as industrial life or burial insurance contracts, these policies were sold to African-Americans at a higher premium than those sold to white customers. Most of these policies were sold before 1970, but information provided in an audit revealed race-based premiums still are being collected today.
The Insurance Department determined this pricing practice is in direct violation of Pennsylvania's Unfair Insurance Practices Act of 1974.
The Insurance Department's settlement order includes the United Insurance Company of America, Union National Insurance Co. and The Reliable Insurance Company, which are affiliates of Unitrin. This settlement is in conjunction with a national settlement between 44 jurisdictions and the Unitrin Insurance Group over charges of racially discriminatory rating practices in the sale of life insurance.
While Unitrin already has identified approximately 5,200 Pennsylvania residents who own, or owned, policies affected by the old rating practices, other policyholders and beneficiaries not identified by Unitrin also may qualify for benefits.
