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I was watching a movie last night called "Fences", starring one of my favorite actors, Denzel Washington. It was about a black family in the '50's. It got me thinking
Insurance companies that used race based pricing
- Thread starter shonceman
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- 15,041
Thinking does it still exist?
It depends upon who you ask as to whether it still exists or not. Zip code alone and particularly when combined with income and net worth is a pretty good substitute.
At the risk of being both naive and cynical, I don't think it is race based anymore. It is simply socioeconomic based.
How was the movie, I haven't seen it yet.
It depends upon who you ask as to whether it still exists or not. Zip code alone and particularly when combined with income and net worth is a pretty good substitute.
At the risk of being both naive and cynical, I don't think it is race based anymore. It is simply socioeconomic based.
How was the movie, I haven't seen it yet.
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Oops, pushed the wrong button.
Anyway, it got me thinking about several things, one of which was the history of the life insurance industry's practice of race based pricing. Remembering all the lawsuits that were going on a dozen or so years ago. Has anybody ever seen a list of the companies that were found to be engaging in this practice?
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Well acted, engaging. Based on the play. Very melancholy, though.
No, there's definitely no more of that activity as far as I know. In fact, most state insurance depts have forced insurers to adopt more recent standardized mortality tables, which don't include race as a factor. Plus with all the millions of dollars paid in lawsuits, what company would dare?
- 15,041
Companies dare all the time. Although yes I do agree with your basic premise. When I wrote it, I was thinking more of auto, renters and home insurance. Where credit and zip play a big role. Even with health insurance, zip code can play a role although usually not segmented finely enough to be useful for illegal/unethical discrimination.
- 913
Insurers should be able consider any factor they wish to determine pricing including race.
Now if an insurer wanted to charge a group more purely because they didn't like that group that would be vastly different. Even then it should still be legal to do, but it would be immoral for sure, and I wouldn't do business with that carrier.
Now if an insurer wanted to charge a group more purely because they didn't like that group that would be vastly different. Even then it should still be legal to do, but it would be immoral for sure, and I wouldn't do business with that carrier.
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Yeah, I get that. The first debit company I worked with early in my career didn't sell any homeowners in the state where I was, but they did have old fashioned dwelling fire policies. It was often the only option for many of my clients because all the other companies had "redlined" their neighborhood.
- 15,041
Yes, his opinion and that of his show and staff, but always does a good job of providing sources.
As mentioned in the clip, there is such a history of it, you don't even have to try now, it is just built into the system. Also, I like how he addresses Jim Crow. It wasn't that the South was more racist, we were just more integrated and thus the laws were needed to segregate versus the North where minorities were rarer and already more segregated.
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Fraternal insurance companies can still accept or decline applicants based on ethnicity or religion. So this technically still exists.
Almost all the companies that were in business pre 1960s had some sort of race based pricing or exclusion.. Especially the debit companies.. When I started in 1971, National Life and Accident still had some S&A plans that couldn't be sold to whites. Prior to that they also had a different rate book for the "colored" folks..Their justification was the mortality and morbidity rates were different based on the races. Some companies would sell industrial plans to the blacks but not their ordinary plans. Or, at least that is what their districts did if it wasn't a company policy.
I think back just how far we have come in my lifetime. I remember the blacks having to get their food at the backdoor of the restaurants. Even as a kid, it never made any sense to me that we could eat food cooked by a black person but could not eat that same food siting beside them. Segregated water fountains, bathrooms, seats on the bus or train, etc. were the norm. when I was a kid. I am thankful those days are past.
I think back just how far we have come in my lifetime. I remember the blacks having to get their food at the backdoor of the restaurants. Even as a kid, it never made any sense to me that we could eat food cooked by a black person but could not eat that same food siting beside them. Segregated water fountains, bathrooms, seats on the bus or train, etc. were the norm. when I was a kid. I am thankful those days are past.
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