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Should the Community Reinvestment Act Apply to Insurance Companies?

VII. The Insurance Industry's Investments in Our Communities

The insurance industry - companies, employees and agents - invests in our nation's urban and rural communities every day. Lately, many industries and businesses have discovered the returns to be obtained from being a good corporate citizen. From its very beginnings, the U.S. insurance industry has realized the returns, both economic and social, from investing in the communities where its policyholders live and work.

Community-focused solutions that assist and improve America's minority neighborhoods capture the spirit of America because they involve teamwork, cooperation and partnership. Improved communities are better places in which to live and thrive. They are also better risks and provide better business opportunities. The insurance industry has demonstrated that empowering and developing communities makes good business sense. Thriving communities are hotbeds of insurance activity, both in personal lines insurance and in commercial lines.

A sense of corporate responsibility permeates the industry from its investments in local municipal bond issues to its present focus on urban markets. As many insurance executives have stated: Giving back is good business and good citizenship.

This section gives a sense of the scope of the insurance industry's involvement in and contribution to community development, particularly in urban and minority communities.

Six Areas of Investment in Communities

Many insurance companies, their employees, and agents invest in their communities. Numerous insurer-supported programs geared to inner-city and low-income populations specifically benefit minority communities. Insurance companies support the local chapters of several national organizations with programs targeted at minority communities.

Insurance companies, their employees, and agents provide program support or funding in six broad areas that serve minority communities. These six areas are:

  • urban and civic organizations,
  • health and safety programs,
  • business development,
  • education,
  • volunteerism, and
  • community improvement and development programs.

A few examples of the insurance industry's investment in communities follow.

Contributions or matching gifts to urban and civic organizations help provide mortgages and affordable housing, insurance and investment products, and consumer goods to members of minority groups. For example, 10 percent of one insurance company's taxable income each year funds Habitat for Humanity. Programs or funding for business development in the minority community include agent partnerships, funding of minority business organizations and mentoring programs. One insurance company supports minority banking, while another has instituted agent/insurance company networking sessions.

Insurance companies, their employees, and agents provide programs or funding for education serving the minority community. Seattle's 20-year old Accounting Career Awareness Program for middle and high school students increases the number of minorities in accounting and related business areas. A program with Howard University and other local universities brings young people into the insurance industry, trains them and provides jobs. Across the country, insurers are taking steps to increase the number of minority agents writing insurance in order to make coverage more accessible to minority customers.

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