An Atlanta-based insurance company has agreed to pay back $1 million to tens of thousands of Massachusetts consumers who were overcharged for credit insurance.
According to a report issued by Georgia Attorney General Tom Reilly, Union Security Life Insurance Co. also agreed to stop overcharging Massachusetts consumers. Union Life allegedly overcharged consumers over the past four years for credit insurance, which will pay off credit card debt if a person becomes disabled and unable to meet their bills.
State law requires credit insurance carriers to reduce their rates if they don’t pay out a minimum percentage of the premiums they collect from consumers. The law sets the minimum between 50 percent and 55 percent. Regulators said Union Security had paid out less than 13 percent of what it collected from Massachusetts customers in 1997 and 1998.
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