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The shifting rhetoric of insurance denial

By Glenn, Brian J
Publication: Law & Society Review
Date: Saturday, January 1 2000
HEADNOTE

The focus on actuarial tables and rating systems by state regulators is insufficient to ensure that protected groups are not discriminated against by the insurance industry. The most powerful tool used to exclude unwanted groups

from the insurance pool lies in the subjective underwriting guidelines companies utilize, yet the rhetoric surrounding the insurance industry shifts attention away from this area.

In this article I focus on the narratives that members of the insurance industry construct to depict certain groups as uninsurable. If we study the stories that inform the creation of actuarial tables and underwriting guidelines, we arrive at a far different perspective on antidiscriminatory regulation than is currently practiced.

I. Introduction

As recent court cases and academic studies have revealed, discrimination against certain groups by the insurance industry still remains an unfortunate practice (United States v. American Family Mutual Insurance Company [1995]; "Insurer To Revise Its Urban Business," New York Times, 1 Feb. 1997; Treaster 1998). By definition, discrimination occurs when two otherwise identical individuals are treated differently by virtue of a particular characteristic. Paired testing using black and white applicants has revealed that illegal discrimination (i.e., using distinctions based on criteria banned by law) can take many forms, from agents refusing to return customer phone calls, to offering higher prices and weaker policies, to denying outright coverage for members of unwanted groups (Lynch 1997; Smith & Cloud 1997; but see Wissoker, Zimmermann & Galster 1998). Discrimination can also take the more subtle form of the insurance company being slower to handle the claims of ethnic minority claimants than of whites (Baker & McElrath 1997; Chan 1999). Insurance companies desire certain groups more than others as customers, and as a result, those who do not fit the underwriter's vision of the ideal member of society, such as certain racial and ethnic minorities, the poor, gays and lesbians, and people with alternative lifestyles, can have a difficult time obtaining desired coverage.

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