NU Online News Service, Dec. 29, 2003, 6:10 p.m. EST – Metropolitan Mortgage & Securities Company Inc., Spokane, Wash., says it has let state regulators place its life insurance subsidiaries under voluntary administrative supervision to protect the subsidiaries from problems at the parent company level.[@@]
Metropolitan Mortgage, which has no connection with MetLife Inc., New York, says Washington regulators will supervise the Western United Life Assurance Company unit.
Idaho regulators will supervise Old Standard Life Insurance Company, and Arizona regulators will supervise Old West Annuity & Life Insurance Company.
Metropolitan Mortgage ran into problems earlier this year, after it responded to complaints by the NASD, New York, by agreeing to shut down its broker-dealer unit, Metropolitan Investment Securities Inc.
The NASD alleged that the broker-dealer unit had “inadequate supervisory procedures and engaged in fraudulent and unethical sales practices in connection with the sale of debentures, investment certificates and preferred stock issued by the company and another affiliated company,” Metropolitan Mortgage says. “[Metropolitan Investment Securities] neither admitted nor denied the allegations.”
The securities unit agreed to pay a fine of $500,000, to pay about $2.8 million back to some investors and to maintain a special $1 million escrow account for the benefit of other investors, Metropolitan Mortgage says.
Western United Life has $1.7 billion in assets and a sales force of 1,600 independent agents and brokers.
“The administrative supervision does not reflect on the solvency of Western United Life,” John Van Engelen, the new president of Western United Life’s holding company, says in a letter to employees and agents.
Western United Life wants to put policyholders’ interests ahead of all other considerations, Van Engelen says.
Van Engelen has worked for Western United Life for 20 years. He replaces C. Paul Sandifur Jr., who has resigned from the company, Metropolitan Mortgage says.
The Old Standard Life unit began operations in 1990 and has licenses to conduct business in 8 states.
Western United Life acquired Old West Annuity, which formerly was known as Arizona Life Insurance Company, in 1996. The Old West Annuity unit has licenses to operate in 6 states.