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Life of Georgia to settle
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January 9, 2002: 6:40 a.m. ET
Insurer reportedly agrees to pay $45M to settle race-based pricing charges.
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NEW YORK (CNN/Money) - Life Insurance Co. of Georgia tentatively agreed to pay African-American customers $45 million to settle allegations the company routinely charged blacks higher rates than whites for identical policies, according to a published report Wednesday.
The settlement, expected to be announced by the end of January, would end a lawsuit brought by black policy holders in a Louisiana federal court as well as a multistate investigation by insurance regulators, the Wall Street Journal reported.
The settlement would be the second largest to date in a series of such lawsuits and investigations into race-based pricing by life insurers. In 2000, American General Corp. agreed to pay $215 million to settle similar allegations, the paper said.
Atlanta-based Life of Georgia was founded in 1891, and was acquired in 1979 by ING Groep NV of the Netherlands.
"We are very close to wrapping up negotiations, and we're very confident we're going to reach a settlement shortly," ING spokeswoman Dianne Bernez told the Journal.
Bernez declined to discuss details, but others with knowledge of the talks told the Journal the agreement would involve reimbursing African-American customers $45 million to $60 million in addition to smaller fines paid to the states.
About 3 million policyholders could be eligible for compensation under the settlement, Georgia Insurance Commissioner John Oxendine said.
The tentative settlement comes as state insurance departments nationwide have launched investigations into similar practices at more than 100 life insurers. In December, the South Carolina Insurance Department said it had moved to impose fines and suspend the operating license of Liberty Life Insurance Co. for collecting higher premiums from blacks than whites. 
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