Press Release June 30, 2000 DC Department of Insurance to Receive $96,800 in Fines in Race-Based Insurance Discrimination Settlement Washington, DC - Lawrence H. Mirel, Commissioner of the DC Department of Insurance & Securities Regulation (DISR) signed a consent order this week that applies terms of a nationwide settlement against American General Life & Accident Insurance Company to the District of Columbia. American General has agreed to pay the District a $96,800 fine and provide thousands of dollars in restitution and other relief to African-Americans in the District who bought "industrial life" insurance policies and paid higher premiums than other consumers. For the settlement to take effect, commissioners in the states where most of American General's customers who allegedly paid race-based premiums lived, must sign similar orders. Remedies for race-based pricing are available to District purchasers of industrial life and similar burial-type policies. DISR has identified 18,538 consumers who may be entitled to relief. The District remedies are part of a nationwide settlement that will cost American General $7.5 million in fines and $206 million in restitution and other relief. Independently of the settlement, American General agreed to make a $2 million donation to the National Association for the Advancement of Colored People. American General did not sell the policies with race-based premiums but acquired them when they bought smaller companies that had originally issued the policies. American General said it continued to charge the discriminatory premiums without realizing African-Americans were paying more than others for the same coverage. "It is outrageous that race-base premiums were ever in use and incomprehensible that they are still being collected," said Commissioner Mirel. "We are pleased that American General recognized its responsibilities and was quick to reach a settlement that will return money to the citizens of the District." The DC Department of Insurance and Securities Regulation has begun its own separate inquiry to all writers of industrial life and other small-premium insurance in the District to determine if other companies have engaged in race-based pricing practices. The Department has developed a survey to be distributed next month to the over 500 companies that sell life and burial policies in the District. American General will be responsible for individual reimbursements and has established a toll-free telephone number, 1-800-681-4944, for current and former customers with specific questions about the settlement. DISR also has information pertaining to the settlement, including who may be eligible for restitution, on its web site at www.disr.washingtondc.gov. The DC Department of Insurance and Securities Regulation (DISR) has two missions, (1) to provide fair, efficient and fast regulatory supervision of the insurance and securities businesses for the protection of the people of the District of Columbia, and (2) to create conditions that will retain and attract national and international insurance and other financial businesses to the District.