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Life Health > Life Insurance

Maine Hits Insurer With $400,000 Fine

By Allison Bell

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Bankers Life and Casualty Company reached an agreement with Maine insurance regulators to resolve complaints about producers in 2 branch offices in Maine.[@@]

The Chicago insurer has agreed to pay $400,000 in fines, invest $100,000 in organizations that help Maine senior citizens, strengthen producer training programs, pay independent auditors to examine its Maine branch sales offices and organize a customer satisfaction survey to see whether customers understand the products they have bought and are happy with their purchases, according to the Maine Bureau of Insurance.

Bankers Life also has agreed to pay restitution to Maine consumers who have been hurt by Bankers Life producers, and Maine insurance regulators are determining the precise amount of the restitution, officials say.

Bankers Life is a unit of Conseco Inc., Carmel, Ind.

Maine consumers filed 70 formal complaints against Bankers Life in connection with the sale of life, health and annuity products between Jan. 1, 2002, and April 11, 2005, officials say.

Possible violations of Maine law described in the complaints include policy misrepresentation and false statements about Bankers Life’s financial condition, officials say.

“The substantial number and the nature of the consumer complaints received by the bureau shows an unacceptable level of incompetence in selling policies to elderly Maine customers,” Maine Insurance Superintendent Alessandro Iuppa says in a statement about the consent agreement with Bankers Life.

But Bankers Life also has expressed a desire to take substantial steps to change the culture in its Maine branches, Iuppa says.

Once Maine officials told Bankers Life about the complaints, “we responded immediately,” says Linda Heacox, Bankers Life’s marketing manager. “We’ve fully cooperated with the bureau.”

Bankers Life also developed a plan for correcting past problems and preventing future problems that has served as the basis for the consent agreement, Heacox says.

Heacox says Bankers Life already has started implementing some component of the plan and believes it has developed a stronger relationship with Maine insurance regulators while addressing regulators’ concerns.

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