Race Based Insurance

posted on:
May 22, 2007

author:
Staff

category:
Fraud

Race based premium insurance

From the 1930s until the late 1970s, at least 30 insurance companies engaged in the shameful practice of charging “race based insurance premiums” on so-called “burial policies” and/or “industrial life policies.” This reprehensible practice involved a national scheme to unlawfully charge African Americans higher insurance premiums based solely on the color of their skin. Many of these companies further compounded their wrongdoing by undertaking sophisticated measures to cover up their misdeeds. Some charged this inflated premium up to 1980.

Our firm is involved in litigation against American General Life and Accident Insurance Company, and its affiliates and subsidiaries, Life Insurance Company of Georgia, Liberty Life Insurance Company, Liberty National Insurance Company, Monumental Life, and National Security Insurance Company. We have previously settled over 10,000 claims with numerous other defendants. The typical “race based insurance” case involves an insurance policy sold prior to 1980 with a relatively low face value (usually under $5,000.00).

We continue to lead the nation in this area of the law for those persons who wish to “opt out” of the class action lawsuits that often offer minimal benefits to certain policyholders compared to the potential recovery they may receive by filing their own lawsuit.

Discrimination Class Action Against Liberty National To Proceed

As previously reported, the United States Court of Appeals for the 11th Circuit has denied Liberty National Life Insurance Company’s request for “immunity” from racial discrimination claims arising from the sale of burial insurance policies. That decision is a huge boost to African Americans who may have purchased insurance through race based premium policies. In a class action suit filed in federal district court in Alabama, four African American policyholders alleged that Liberty National engaged in racial discrimination by targeting low income African Americans and selling them industrial life insurance policies with higher premiums and lower benefits than those sold to Caucasians. In answering the federal civil rights claims brought by the plaintiffs, Liberty National asserted that the plaintiffs’ federal civil rights claims were barred by an archaic legal doctrine known as the “rule of repose.” This doctrine, which has been used almost exclusively in property disputes, provides that claims which are not brought within 20 years from the time in which they could have been filed are barred. Ironically, this rule of law was first adopted in this state in an 1858 case that involved a legal action to “recover certain slaves.”

Liberty National, which is owned by the Torchmark Corporation, did not deny that it charged African Americans more for their insurance, it merely sought “immunity” for its actions based on the “rule of repose.” Liberty National argued that the plaintiffs’ claims should be barred even though they had no knowledge that they were being discriminated against. When the federal district court refused to accept Liberty National’s argument, the company appealed the decision to the 11th Circuit.

The 11th Circuit firmly rejected Liberty Nationals’ argument and held that the doctrine does not apply to federal civil rights claims. This landmark decision opens the door for thousands of African Americans to seek the remedies they deserve as a result of these discriminatory practices. Discovery in this action will reveal conduct that will be both shocking and shameful. The documentation already filed in this case includes an affidavit from a former Liberty National agent that states that Service Insurance Company (a subsidiary of Liberty National) was commonly referred to as “the black-bone of Liberty National.” The company will now have to answer for these practices that have been hidden from the policyholders for years. This decision by the 11th Circuit confirms the old saying that “no lie can live forever.”

Our firm has filed a large number of these Liberty National claims in federal court, all of which have been consolidated before the Honorable U. W. Clemon, United States District Judge for the Northern Division of Alabama.The discovery in those cases is proceeding swiftly and we look forward to a trial date soon.

What can I do?

We enjoy a distinct national reputation for excellence in the area of consumer fraud litigation. This litigation includes individual cases as well as class actions that have been filed throughout the country. Most of the cases involve wrongful conduct of insurance and finance companies including fraud and bad faith. We are also a national leader in the fight against mandatory binding arbitration in consumer contracts.

If you or a loved one has become a victim of insurance fraud, you may be entitled to compensation. For a free legal consultation, contact us today!

 

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