Texas Department of Insurance Secures Additional Benefits to Settle Race-Based Insurance Claims

AUSTIN – The Texas Department of Insurance has reached a settlement with Americo Life, Inc. to secure additional benefits to African-American consumers who were historically sold various types of insurance policies at higher rates than policies sold to whites. TDI served as the lead regulatory negotiator for a group of five states that acted on behalf of all the members of the National Association of Insurance Commissioners (NAIC). The other members of the group who signed on to the settlement are Georgia, Florida, California, and Ohio, the states with the greatest number of affected policies after Texas. 

The policies were not sold directly by Americo but by insurance companies that Americo subsequently acquired. A list of these 55 companies is attached and is also available on a special Race-Based Pricing website maintained by TDI at: www.tdi.state.tx.us/consumer/rbsettlement.html. Although race-based pricing had stopped by 1960 in the sale of new policies, death and surrender benefits for many older policies were never adjusted.  The settlement applies to policies issued by the named companies between 1928 and 1960. The settlement only applies to policies that were in force after December 31, 1959. 

"It's not enough to acknowledge that discriminatory pricing was wrong," said Texas Insurance Commissioner Mike Geeslin. “It’s incumbent upon us to try and restore the value that should have been in the policy in the first place. We’re very pleased to be able to take another significant step in bringing that chapter of the industry's past to a close.” 

The settlement affects small face amount life insurance policies, commonly known as industrial life or burial policies, which were sold to African-Americans at a higher cost or with lesser benefits than policies sold to white persons.  For each person who is identified as a holder of an eligible policy, the company will add 25% to the face amount of the policy. All valid claims under this settlement will be honored for a period of four years.

Race-Based Insurance Policy Webpage

TDI’s Race-Based Pricing Web Resource Page includes information on current and past settlements, list of insurance companies involved in race-based pricing, and online claim forms and complaint forms. It can be accessed at: www.tdi.state.tx.us/consumer/rbsettlement.html.

For more information contact: PIO@tdi.state.tx.us

Last updated: 11/16/2007