The Florida Department of Insurance has banned race as an underwriting criteria and has been investigating small-face-value life and industrial life insurance policies sold in Florida. In addition, the Florida Department of Insurance is negotiating a settlement with companies that the NAIC will use as a framework for a national settlement.
“The use of race as an insurance underwriting criteria is inexcusable. It is a practice that is opposed unanimously by state insurance regulators. We, in our separate jurisdictions, are checking with companies to see if it is still being used. If it is, the practice must stop immediately. In addition, state insurance regulators will seek joint settlement with the companies that have not taken the necessary corrective action, including restitution,” NAIC President and Kentucky Insurance Commissioner George Nichols III said.
In part, the resolution states the members of the NAIC “will redirect regulatory analysis of the small-face-value life insurance business, in all its various distribution forms, and will emphasize in this analysis the overriding goal of fair policyholder treatment … addressing the issue of fair value for the premiums paid.”
“We are just beginning our discussions about how to proceed with the settlement issues, including restitution and an assessment of the small-face- value products. I am optimistic that we will address this issue yet this year,” Nichols added.
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