Oakland, CA, Sept. 11 -- A life insurance company discriminated against a man with muscular dystrophy when it charged him twice its going rate for life insurance, the U.S. Court of Appeals ruled today. The case, say attorneys, should send a "wake-up call" to the insurance industry.
Howard Chabner had been charged "a double premium" because of his disability, even though United of Omaha Life Insurance Company didn't use any actuarial data in charging the higher premium.
The Ninth Circuit said that "there is no question that United's mortality rating was arbitrarily high." There was no justification for the "discriminatory premium," said the court. The case challenged the widespread practice of inflating premiums for people with disabilities without any basis in actuarial data or experience.
The case "sends an important civil rights message to all insurance companies that they cannot continue to arbitrarily charge people with disabilities more for insurance," says attorney Sid Wolinsky of the Oakland-based nonprofit public interest law firm Disability Rights Advocates, which handled Chabner's suit. "Insurance companies need to overhaul the way they do business. Rates they charge to people with disabilities must be justified by hard actuarial data."
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