Race-Based Insurance Discrimination

For more than fifty years, insurance companies maintained a scheme in order to increase its own revenues and profitability by targeting low income, impoverished, minority segments of the population and marketed industrial life insurance products for sale to these consumers. Shockingly, many insurance companies charged African-Americans more for these policies than it charged similarly situated Caucasians. These insurance companies constructed the industrial policies with small face values, charging weekly or monthly premiums often under $1, and marketed these policies through agents who were given exclusive territories, known as "debit routes." To effectuate the sale and administration of the industrial policies on a "debit" basis, insurance agents were trained to personally visit the homes of policyholders residing on their routes to collect the premiums and develop a personal relationship with the policyholders that would facilitate the sale of additional industrial insurance products in the future. Insurance companies trained its agents to manipulate the emotions of prospective policyholders by instilling in, or playing to, a sense of shame or guilt in leaving their loved ones without sufficient funds to pay for funeral expenses at the time of their death.

In addition, the insurance companies knew that industrial policyholders were doomed to pay premiums over their anticipated life expectancy which would greatly exceed the face value of the policies by shocking amounts. In some cases, policyholders paid as much as five times the face value of their policies. The attorneys at Strom Law Firm, L.L.C., along with many attorneys nationwide, believe that these sales practices were unwarranted and violated several anti-discrimination laws. As a result, we have filed suit against some companies and are presently investigating several other companies to attempt to recover from the insurance companies any illegal premiums paid over the last several years for policies purchased before 1975. We are presently investigating the following companies:

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