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Race-Based Premium Settlement ReachedContact: OFIS (Toll-free) 1-877-999-6442
For Immediate Release
December 17, 2004
Office of Financial and Insurance Services Commissioner Linda A. Watters today
announced that Michigan consumers will benefit from the multi-state settlement
with New York Life Insurance Company concerning past discriminatory underwriting
practices against African-American policyholders from 1920 through 1948.
"Insurance should be based on risk factors, not race factors," said Watters.
"Basing rates on race is just plain wrong. Michigan consumers discriminated
against by New York Life deserve this refund with interest."
Under the settlement, which includes 166 Michigan policyholders (or their descendants),
New York Life will pay refunds on endowment policies issued to African-American
policyholders between 1920 and 1948 where the policyholder was charged higher
premiums due to race. Refunds of the extra premiums will be made with interest.
In June of 2000, the New York State Insurance Department announced an investigation
into allegations of race-based underwriting of life insurance by its licensees.
Through the National Association of Insurance Commissioner, Michigan was included
in the settlement negotiations with New York Life. The investigation focused
on different premium rates, compensation rates, risk classifications and unequal
treatment with regard to dividends, benefits of other policy terms or conditions
that were based solely on race as evidence of race-based underwriting. The Department
continues to pursue other investigations involving New York licensees
New York Life will be engaging in an outreach initiative including mail, print
and Internet communication to notify affected parties. For more information
on the settlement, please call 1-866-891-0614 or 1-800-420-8141 (TTY) or visit
www.outreachprogram.info.
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