Michigan residents get insurance settlement

LANSING -- About 165 Michigan residents or their descendants will be part of a settlement with New York Life Insurance Company related to past race-based pricing.



The settlement, announced by state officials Friday, stems from a multistate deal struck this summer with the insurance company. It covers Michigan policies dating from 1920 through 1948.



Black policyholders who were charged higher premiums on endowment policies due to race will be eligible for refunds with interest. The amount will vary depending on what customers were charged, length and type of policy and other factors.



"Insurance should be based on risk factors, not race factors," said Linda Watters, commissioner of Michigan's Office of Financial and Insurance Services. "Basing rates on race is just plain wrong."



The settlement, led by New York state insurance officials, was announced this summer. Other states have signed onto the settlement since, New York Life said Friday.



The agreement stems from an investigation started in 2000 by the New York State Insurance Department. It focused on different premium rates, compensation rates and other factors.



The agreement is similar to one announced in June with Cincinnati Life Insurance Co.



At least 14 Michigan policyholders are involved in that case, which involved higher charges for minorities on certain relatively low-cost life insurance policies sold between 1947 and 1968.



Those policies were issued by Inter-Ocean Insurance, which later was bought by Cincinnati Life.