THE REST OF THE NEWS - Racist Insurance Racket by Lorenzo Komboa Ervin

When I was a boy coming up in the South, I used to
hate to see the army of white insurance men coming
into the Black community. They represented a variety
of companies, many long since having been swallowed up
by some multinational conglomerate, or not even in
existence at all now. But I remember them well.

They engaged in all kinds of crooked hijinks while
"writing insurance": driving people into debt, seizing
their properties, and even taking advantage of Black
women. In fact, one of the worst scandals in my
community was the pregnancy of Thelma, the 16 year old
daughter of a man up the street from me, who gave
birth to a white man's baby. When she was asked about
it, she said it was Bob's baby, the white insurance
man. He told her that if she didn't have insurance,
her and her family would die broke or have their
property taken over by the government. He got them
into deep debt and then took advantage of this poor
girl to pay him in sexual favors for all this. "Bob"
was notorious all over my community for this kind of
sexual misconduct and other scams, so I made sure that
my family would not let that man into our house, or do
business with his company.

It was the late 1950's White people thought they could
get away with almost anything in the South in those
days, but they wasn't getting a damn thing in my
house! I wouldn't let an agent into the house at all,
less known that scoundrel "Bob", made them stay on the
porch and conduct their business outside. Rain, sleet
or snow. I was somewhat frustrated however because I
knew I couldn't keep them out entirely because my
mother tried to treat them like "regular people".
They were hardly that, they were just crooks with
ink-pens. I think she trusted them way too much, like
she did most white people.

Well, when me and my cousin got bigger and meaner, and
after the riots in the 1960's which took place in
Chattanooga, they stayed away entirely from my
neighborhood, used to just send us letters asking us
for the money. Black Power used to scare white folks
to death back then. They were afraid for life or limb
if they ventured where too many Black folks were, they
thought we were all angry.

But that is not what this article is about. Their
sexual hijinks aside, the worst thing these insurance
companies ever did was to rob Black people by charging
them more money for less insurance than whites. For
years, I used to tell my mother and others in the
Black community that they were being ripped off by
these white insurance men, but they just ignored me,
thought I just "hated Whites" or was crazy.

Listen, these insurance agents used to have people
paying on a policy with a face value of $200 for 30 or
40 years! Certainly these policies would have long
since been paid off. Sometimes, they would only charge
$.40 a week, and here come that white man every
Wednesday to collect that paltry sum. But it's not so
"paltry," when you got millions of poor Black people
all over the South paying it. No matter how long or
how loud I screamed about this to my family and the
neighborhood, they never paid me any attention. Simply
did not believe it. I was a kid anyway, what did I
know?

Well, guess what? Seems I was right. It just took 25
years to prove it. American General Life and Accident
Insurance Company in Nashville was sued in the mid
1990's by a group of Black Plaintiffs and forced into
a settlement for $206 million, [and an additional $24
million in legal fees], and then fined by all 50
states for $7.5 milion in a race-based and
unfair-pricing lawsuit. They even paid $2 million
dollars in "voluntary contributions" to the NAACP,
which had nothing to do with the lawsuit in the case,
just giving them "hush money" or for public relations.
The settlement became final in September 2000.

American General had taken over a number of old
companies: Gulf Life of Florida, Home Beneficial Life
Insurance Co., Independent Life Insurance Co.,
Industrial Life Ins. Co, and others, all of which had
routinely charged Blacks higher premiums than whites
for burial insurance policies. These burial
policies-or "industrial" policies as they were known
then-supposedly covered funeral expenses when an
insured person died. These policies generally have
face values of less than $1,000.

While the practice of charging race-based premiums
mostly stopped in the 1970's, the suit alleged that
American General never adjusted premiums to reflect
fairer rates. For instance, one plantiff has paid
$3,000 in premiums for a $500 burial policy, and this
was pretty routine. American General had been
collecting the race-based premiums up until a few
months in late 2000, when the Florida Department of
Insurance issued a notice to the insurance company to
stop.

The Florida Department of Insurance has now issued
subpoenas to four other insurers who have sold the
bulk of bruial policies in Florida since 1959. The
companies are Capital Security Life Insurance Company,
Liberty National Life Insuance Company, Life Insurance
Company of Georgia (now controlled by a Dutch
conglomereate), and United Insurance Company of
America. Although these companies are the ones being
acted on by Florida, the fact of the matter is that
they sold such race-based policies all over the South.

"Bob" worked for Life Insurance Company of Georgia,
and IMHO they were involved in every dirty racist deal
in Tennessee and Georgia, that they are being
investigated for in Florida. When my mother died
recently, I discovered that my family had a burial
policy with this company that they had paid for years,
way over the premium of $144. It was paid way back in
1972, but she kep paying until the late 1980's. I
believe that this is typical of many Black families,
and that the officials in those other states should go
after this company, if no other, just like they did
with American General.

The real lesson here however is just how thoroughly
corrupt the capitalist system is. An insurance
company, which is a racket which bets on your death or
lack of accidental injury until old age, can charge
whatever they can get away with. They charged Black
and poor people all sort of policies during their
lifetimes during the 1950's and 60's, when they knew
full well that these policies were worthless to really
bury them. They never renegotiated the terms of the
policy, as long as nobody said anything and the
"insured" was none the wiser. It's a scam, almost a
Ponzi-style scheme, where people sign on thinking they
will all be healthy, wealthy and wise but then find
out they are just out of money by the promoters.
What really needs to happen is that some of these
people need to go to jail, instead of just being
fined, and their companies should be seized by the
relatives of the people who have been defrauded.

Do you know that I am still fighting CONSECO, the
company that sold my mother an insurance policy in
1985, supposedly a "prepaid burial policy" that she
paid on for 11 years, and nobody can even account for
the money and they also refuse to grant a refund? The
funeral home company refused to buy my mother with
this policy, claiming it was worthless. This is
typical of these capitalist moneymen, they renege on
these policies when you need them. Their motto should
be: "it's your money or your life, we don't care which!"