Unitrin Inc. insurance company to repay millions in discrimination suit

Jet, May 27, 2002

Unitrin Inc. agreed recently to settle a class-action lawsuit and repay $27 million to clients overcharged for life insurance because they were Black.

The settlement came after two years of investigation and negotiations among the companies, insurance regulators and attorneys representing policyholders.

The money will go to about 467,000 people who held policies sold from the Depression era through 1970. Insurance companies during that time often charged Black customers more than Whites on the grounds that they were perceived to have a shorter life span and were a higher insurance risk.

Unitrin will also pay $6 million to policyholders who, because of poor recordkeeping, never received their life insurance benefits. The company agreed to an additional $1 million nationwide regulatory settlement.

Company officials said the settlement would reimburse Blacks who unfairly spent more money for coverage equal to that of Whites.

Holders of racially underwritten policies can either increase death benefits or receive a cash refund instead of a death benefit, and Unitrin will reduce any future premiums. The amounts paid will vary because some polices were held longer than others.

Beneficiaries of claims on race-based policies paid after 1960 will get cash payments. Those whose policies lapsed or were terminated can also make claims for benefits.

Policyholders who may be affected by the settlement and have questions should call (877) 347-4719.

Unitrin, based in Chicago, is the parent company of the Union National Life Insurance Company, the United Insurance Company of America and Reliable Life Insurance Company.