|Tuesday, September 21, 1993
Suits Accuse Auto Insurer of Ethnic Bias;
Insurance: Hmong claim Farmers discouraged their business
quoting high rates. Company denies the charges.
By: THOMAS S. MULLIGAN
TIMES STAFF WRITER
Farmers Insurance Group has conducted a statewide
campaign against Southeast Asians, discouraging their
deliberately boosting the prices it quotes them for auto
according to lawsuits filed by consumers and two former
Farmers denies the charges.
In 1990 or 1991, under pressure to cut losses because of
freeze that followed passage of Proposition 103, Farmers
agents to get Southeast Asians--particularly Hmong--off
insurance rolls and to keep new ones from buying
policies, said former
agent William Black, one of the plaintiffs in the three
suits filed last
week in Los Angeles County Superior Court.
The reason given was that the Hmong were poor drivers,
Black said in a
telephone interview Monday. The Hmong, a rural people
from the mountains
of Laos, settled in the Central Valley in great numbers
after coming to
America as war refugees in the mid-1970s.
Black, who owned a Farmers agency with offices in Fresno
said he had a heart attack at age 33 last year, brought
on by the stress
of lying to Hmong customers who trusted him.
On direct instructions from superiors at his regional
Merced, Black systematically purged his client lists of
Hmong and other
Southeast Asians by falsely inflating their estimates of
miles driven per
year, which caused their premiums to balloon by one-third
or more, he
" 'Get rid of them by any means,' " Black said
he was told.
For new customers, he said he would manipulate the
gave him in order to double the proper rate, which
them from buying.
Such discrimination is illegal in California.
"I don't believe we've even seen the lawsuits,"
Farmers spokesman John
Millen said Monday. "In any case," he added,
"Farmers does not
discriminate, or we wouldn't have grown to be the
insurance company in California. We are serving the Asian
a perfect example is our record in the Los Angeles riots,
where we paid
$53 million in claims, much of it to Korean and other
Lawyers representing the agents and customers conducted
"sting" operation, which they said proves
Farmers agents quote far higher
rates to Southeast Asians than to Caucasians seeking
In late August and early September, Hmong posing as
three Farmers agencies in Fresno to get prices. Although
clean driving records and otherwise qualified for
Farmers' best rates,
all three were offered coverage from Farmers' Mid-Century
subsidiary, which caters mainly to high-risk,
said Duane Dorn, a lawyer for the plaintiffs.
When whites seeking virtually identical coverage
for insurance at two of the same three agencies, they
were offered much
cheaper good-driver rates, Dorn said. The prices for six
coverage at one agency were $957 for the Hmong applicant
and $558.10 for
the white. Another agency's prices were $898.10 and
respectively, he said.
One of the suits is a class action filed on behalf of the
and seeks punitive damages of $50 million. The two other
damages of $10 million each, allege wrongful termination
of Black and
ex-agent Tou Xiong, a Hmong who worked in a Fresno-area
Complaints were also filed with the state Insurance
is investigating, Dorn said.
Although all the examples cited were from the Central
said information from the former agents and from Asian
led him to believe the bias is statewide.
Black, the former agent, said he and fellow agents would
trade tips at breakfast meetings on "the
good-ol'-boy way of getting rid
of this problem." It was important to change
computer records directly,
"so there was no paper trail," he said.
Black said he went along because the regional officers
put him out of business otherwise. He said he was a
but acknowledged that his auto line was unprofitable. He
quit Farmers in
August, 1992, selling his agency back to the company.
"I couldn't handle it," he said. "You go
home and say one thing to
your kids--don't lie--but you're doing the same thing at
Descriptors: INSURANCE RATES; AUTOMOBILE INSURANCE;
FARMERS INSURANCE GROUP; RACIAL DISCRIMINATION --
CALIFORNIA; ASIANS -- CALIFORNIA; HMONGS; CLASS ACTION
SUITS; WRONGFUL JOB TERMINATION SUITS
Copyright (c) 1993 Times Mirror Company