AP NEWS
Related topics

Liberty Life Loses Race-Based Case

August 24, 2002

%mlink(STRY:; PHOTO:; AUDIO:%)

COLUMBIA, S.C. (AP) _ A judge has ruled against a South Carolina life insurance company, saying it illegally charged black customers more than whites for similar policies 40 years ago.

Liberty Life Insurance Co. was contesting state penalties imposed in December by the state Insurance Department, which said the disparity was in violation of South Carolina law and the state constitution.

In his ruling Friday, Chief Administrative Law Judge Marvin Kittrell wrote that ``it is difficult to believe the Legislature intended to allow whites and African-Americans to be divided into separate classes for purposes of setting insurance rates based upon nothing more than their skin color.″

The Greenville-based company was given a $2 million fine by the state Insurance Department and suspended from selling life insurance in the state for one year.

The request for a hearing automatically delayed the Insurance Department’s penalties. Now, any penalties will be determined by the court later.

Liberty Life’s black customers paid up to one-third more for burial insurance policies than white people, Insurance Department Director Ernst Csiszar said.

The Department issued the fines because people still were in possession of race-based policies.

Liberty Life said it charged black customers more for insurance only because blacks had shorter life expectancies than whites when the policies were sold years ago. The rates have been the same for about four decades, Liberty spokesman Jim Phillips said Friday.

Phillips said his company was disappointed with the ruling but optimistic the case would be resolved soon.

AP RADIO
Update hourly