Lawsuit Insurance company discriminated against Haitians
January 24th, 2008, 1:59 am Hobby Shops
A St. Lucie County policyholder was issued a 10-year, $100,000 life insurance policy that he said was canceled two years later after an underwriter called him and subtly asked him in friendly conversation if he planned to ever visit Haiti. He replied that he would like to visit Haiti in the future, but at the time had no money for the trip. The underwriter then told him his policy was immediately canceled, according to the lawsuit.
Joyce Lane of Torchmark Corp., the parent company of Alabama-based Liberty National, said she was unfamiliar with the case and would not comment on an active lawsuit.
The new allegations are similar to ones Liberty National face several years ago. It was accused of selling policies to blacks for higher premiums and lower benefits than to other customers. The company settled the nationwide class-action lawsuit for $6 million in 2006.
The Florida lawsuit seeks at least $75,000 in damages.
“Liberty has known that the targeted members of the black Haitian-American community are generally unsophisticated with respect to understanding the details of insurance and financial dealings and are ill-equipped to understand the technical language of Liberty’s life insurance polices,” said the lawsuit filed Jan. 14 in Miami federal court.
More than a third of the country’s Haitian population lives in Florida, according to the U.S. Census.
Liberty National trained Haitian-American sales agents to sell life insurance policies door-to-door in Haitian communities, according to the lawsuit.
Starting in 2004, Liberty National began denying or rejecting standard life insurance policy applications filed by those sales agents, even though the applicants met the company’s requirements, the lawsuit alleges.
In Florida, insurance companies are allowed to ask about an applicant’s race, nationality or ethnicity, but cannot use the information as criteria to write policies or determine who gets a policy, according to the state’s Office of Insurance Regulation. Company’s can only cancel a policy in cases of fraud.
However, Liberty National underwriters allegedly asked whether applicants had previously traveled or wanted to visit Haiti. Some underwriters also called applicants to “listen for a ‘Haitian’ accent,” the lawsuit states.
Life insurance companies routinely ask potential policyholders about their foreign travel, along with questions about smoking or risky hobbies such as skydiving, said James Hunt, a life insurance actuary with the Consumer Federation of America.
They cannot terminate a policy because of foreign travel, but can refuse to issue one in the first place, Hunt said. Companies also have a limited amount of time to contest a policy and rescind it if information on the application was misrepresented, he said.
“If you’re going to Iraq, nobody wants to write you a life insurance policy,” Hunt said. “Most of us know Haiti can be a dangerous place.”
The U.S State Department has issued a travel warning for Haiti, due to ongoing security concerns in the impoverished Caribbean country, including the risk of kidnappings.
The lawsuit also claims that many applicants were also asked to provide immigration papers, a Social Security card or a driver’s license — documentation not demanded of other customers.
The lawsuit also alleges that the company failed to pay death benefits due on policies sold to Haitians.
More articles
Tags: Hobbies, lace, lai, parent company, population, riskRelated posts
