[Congressional Record Volume 146, Number 155 (Friday, December 15, 2000)]
[Extensions of Remarks]
[Page E2209]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




GEORGIA REGULATOR TO LEAD INVESTIGATION INTO INSURER'S RATES FOR BLACK 
                               CUSTOMERS

                                 ______
                                 

                         HON. JOHN CONYERS, JR.

                              of michigan

                    in the house of representatives

                       Friday, December 15, 2000

  Mr. CONYERS. Mr. Speaker, today I wish to commend John W. Oxendine, 
Georgia Insurance Commissioner who will pursue to multistate 
investigation of Life Insurance Co. of Georgia, which if proven true, 
represents a very serious matter, and subsequently needs to be dealt 
with. African-Americans make up a large percentage of the company's 
policyholders. Evidence gathered by state examiners showed the Atlanta 
company, a unit of Dutch INC Group NV, continued at least until 
recently, to charge African-Americans higher rates than whites on 
identical policies sold as late as the 1980's. Historically, records 
have shown that through the first half of the century, U.S. life 
insurers typically either didn't market to African-Americans or charged 
them higher rates based on mortality tables that showed a shorter life 
expectancy for African-Americans. The discriminatory treatment however, 
was through to have been scrapped in the early 1960's, because of U.S. 
Supreme Court rulings and the impact of the civil rights movement.
  I submit the following article from the Wall Street Journal.

              [From the Wall Street Journal Dec. 15, 2000]

Georgia Regulatory to Lead Investigation Into Insurer's Rates for Black 
                               Customers

                          (By Scot J. Paltrow)

       Georgia's insurance department said it will lead a 
     multistate investigation of Life Insurance Co. of Georgia, 
     after initial inquiries showed the company systematically had 
     charged higher, race-based premiums to African-American 
     customers.
       Georgia Insurance Commissioner John W. Oxendine said 
     [evidence gathered by state examiners showed the Atlanta 
     company, a unit of Duth ING Group NV, continued at least 
     until recently to charge blacks higher rates than whites on 
     identical policies sold as late as the 1980s.]
       Life of Georgia was one of the companies cited in a Wall 
     Street Journal page-one story in April, which reported that 
     some life insurers had continued to charge higher premiums to 
     African-Americans on small policies formally known as 
     ``industrial insurance.'' A former Life of Georgia actuary 
     was quoted as saying discrimination premiums continued to be 
     charged by the company well after most other insurers had 
     halted the practice in the 1960s. Florida regulators earlier 
     this year initiated the inquiry into Life of Georgia as well 
     as more than 25 other companies. A lawsuit on behalf of black 
     policyholders is pending against Life of Georgia in federal 
     court in Florida.
       Life of Georgia has strongly denied the allegations. 
     Officials at Life of Georgia, at ING's North American 
     headquarters in Atlanta and at the parent company's 
     headquarters in Amsterdam, didn't respond to telephone calls. 
     In an interview in April, Life of Georgia Chief Counsel 
     Jeffrey B. McClellan said, ``our position is that no 
     discriminatory rates were every employed'' by the company.
       Historical records show that through the first half of the 
     20th century, U.S. life insurers typically either didn't 
     market to African-Americans or charged them higher rates 
     based on mortality tables that showed a shorter life 
     expectancy for blacks. The discriminatory treatment, however, 
     was thought to have been scrapped in the early 1960's, 
     because of U.S. Supreme Court rulings and the impact of the 
     civil-rights movement.
       In June, Houston's American General Corp. agreed to pay 
     more than $215 million to settle investigations by Florida 
     and other states and a civil lawsuit which alleged the 
     company had continued until this year to charge higher race-
     based premiums on about 1.2 million policies held by blacks.
       Mr. Oxendine said that based on examiners' initial 
     findings, the Life of Georgia investigation will include all 
     types of insurance sold by Life of Georgia. He said it was 
     too early to estimate the number of policies or amount of 
     money involved. [But he said African-Americans make up a 
     large percentage of the company's policyholders.]
       The investigation is being conducted on behalf of all 50 
     states. The company's business is licensed to sell in 30 
     states and has policyholders in all states, the Georgia 
     department said.

     

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