Tobacco Institute Attack on Allstate Insurance/Sears

In 1979, Allstate Insurance/Sears introduced its "Healthy American Plan," a life insurance plan that included discounts for non-smokers. Allstate began advertising the discount as a prominent feature of their new plan. The tobacco industry got mad started encouraging businesses to boycott Allstate/Sears.

At the same time, the Tobacco Institute (TI) was running a series of "pro-smoking" ads stressing familiar Institute themes like "reasonable accommodation" for smokers, "individualism," and "Freedom of choice is the best choice."

This irony of this situation was not lost on Allstate's Senior Vice President and General Counsel, Robert Seilor, who noticed that while the TI was touting "free choice is the best choice," they would quickly limit peoples' choice to select a particular insurance plan. He also noted that while the TI was promoting "accommodation," they were at the same time loathe to accommodate an insurance plan based on actuarial assessment of the costs of the non-smoking lifestyle. With these points in mind, Seilor wrote the following letter to the Tobacco Institute:

Mr. Kirk Wayne, President Tobacco Associates 1101 7th Street NW Washington, DC 20036

RE: Allstate Life's Healthy American Plan

Dear Sir,

As you know, representatives of Allstate Life have met with the Tobacco Institute...in response to the tobacco industry's objection to our non-smoker discount, which is a feature of the above-captioned plan. We did so in an effort to convince the tobacco industry that our non-smoker discount and, in particular, our advertising of that discount, was neither anti-smoker not an attack upon the tobacco industry...

...Mr. Yeargin [managing director of the Tobacco Institute] stated that he would continue his campaign against Allstate and Sears, notwithstanding the essentially inoffensive nature of our commercial. He indicated that the Allstate commercial was the "straw that broke the camel's back" and evidenced extreme frustration at the industry's inability to respond to our ads on TV. It is Mr. Yeargin's reaction which prompts, this letter.

Allstate understands the factors which have promulgated your action and your concern for the future of the industry. However, we do not believe that the campaign against Allstate and Sears is well-advised or in the long-range best interests of the [tobacco] industry.

...Your objectives and tactics will be considered by most people, including many in government, as completely contradictory to the Tobacco Institute's advertisements. Those ads make the following points:

1.. They seek "sensible accommodation" between smokers and non-smokers. Your campaign will not be viewed as consistent with that objective. It will be viewed as an anti-non-smoker campaign.

2. Anti-smokers ... desire to force others to comply with their special prejudices. Your campaign against Allstate and Sears will probably be viewed as an effort to enforce your "special prejudices" against others.

3. "Freedom of choice is the best choice." How will non-smokers be apprised of the existence of a discount on life insurance if you seek to "penalize" Allstate or Sears for advertising the existence of the discount? That hardly gives non-smokers any choice at all.

Basically, your...objection appears to be that we are discriminating against smokers....Our rating approach...seek(s) to make the rate fit the mortality experience of the class of risk, i.e. the non- smoker. Credible statistical evidence exists to support the discount. Certainly smokers will pay a slightly higher rate...(approximately 3% for this plan of insurance only). While that is a distinction between the two classes of risks, it is not unfairly discriminatory.

Allstate has no desire to make enemies in the marketplace....The publicity which your efforts are generating (judging by the number of interviews I have granted in the last week) is certain to come to the attention of the national cancer and heart associations as well as the HEW and "anti-smokers" organizations. They will probably use this activity against you in an effort to destroy your factual credibility, since your actions are so contradictory or the Tobacco Institute's own ad. In addition, non-smokers could very well see a backlash or some conversions to the ranks of anti-smokers.

We appreciate that this is an emotional subject for your industry. However, may we respectfully appeal to your objectivity and your self-interest and ask that you reconsider the decision to continue taking action against Allstate and Sears ...

... Thank you for considering our request ...

Very Truly Yours,

Robert S. Seiler [Senior Vice President, Secretary and General Council, Allstate Life Insurance Company]

Related Sourcewatch resources

 * Tobacco industry plan to attack the insurance industry over non-smoker rates

External resources
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