Florida Insurance Commissioner Alleges Discrimination by Life Insurer, Liberty National

Tuesday, July 14th, 2009

TALLAHASSEE, Fla. – Florida Insurance Commissioner Kevin McCarty has ordered Liberty National Life Insurance Co. (Liberty National) to show cause why its license should not be suspended or revoked for alleged violations of Florida law relating to unlawful discrimination based on national origin or potential travel plans.

The Office of Insurance Regulation (Office) conducted a five-month, on-site investigation at Liberty National’s Birmingham, Ala., office, June 23 to Nov. 14, 2008. Office investigators reviewed over 7,000 life insurance application files and found a total of 1,149 violations, of which 1,053 were for discriminatory practices. The findings include specific violations regarding individuals and improper company business practices.

“Discrimination of any kind by an insurance company will not be tolerated by this Office,” said Deputy Commissioner Mary Beth Senkewicz. “We will do everything within our power to ensure that Florida consumers are protected from such unconscionable practices.”

The allegations against Liberty National center on violations of Florida’s Unfair Practices law, Section 626.9541, Florida Statutes: refusal to issue life insurance policies based on national origin; discrimination in underwriting practices based on national origin; discrimination based on potential lawful travel; and discrimination based on citizenship. A significant number of consumers affected by the practices were of Haitian origin or descent.

The Office’s investigation reviewed, among other things, Liberty National’s underwriting practices, agent-training materials, forms and its new-business issue process. The investigation also revealed instances of improper notice and failure to maintain adequate records.

One aspect of the law, generally referred to as the Freedom to Travel Act of 2006, places strict limitations on the ability of an insurance company to deny life insurance based on past or future lawful foreign travel.

The order requires Liberty National to submit proof to the Office, within 21 days, showing why its license should not be suspended or revoked. Liberty National has about 182,000 policies in Florida.

About the Florida Office of Insurance Regulation
The Florida Office of Insurance Regulation (Office) has primary responsibility for regulation, compliance and enforcement of statutes related to the business of insurance and the monitoring of industry markets. The Office protects Florida consumers through regulatory oversight of: insurance company solvency, policy forms and rates, market conduct performance and new company entrants to the Florida market. For more information about the Office, please visit www.floir.com.

 

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