NU Online News Service, Aug. 16, 4:20 p.m. – AAA Life Insurance Company, Livonia, Mich., has agreed to pay a civil penalty of $75,000 for insurance law violations involving the marketing of life insurance policies to American Automobile Association members in Minnesota, according to Minnesota insurance regulators.
Minnesota regulators have accused AAA Life of violating Minnesota insurance marketing regulations by mailing faulty marketing materials to as many as 464,230 state residents between 1999 and 2002.
The solicitations, which resulted in 827 sales of group term life insurance policies, contained several misrepresentations and failed to provide certain required disclosures required by state law, regulators say.
Regulators say, for example, that AAA Life inaccurately stated that its policies could only be purchased during a limited enrollment period. That violates a Minnesota insurance rule that prohibits insurance companies from using false deadlines to pressure customers to make purchasing decisions without adequate time to review and investigate an offer.
AAA Life also stated that continued membership in AAA was not required to continue the policy when, in fact, the policy itself clearly stated that coverage would terminate when AAA membership terminated, regulators say.