The U.S. Securities and Exchange Commission has accepted a sanctions proposal from the broker-dealer arm of a large insurance holding company.

The broker-dealer, IFMG Securities Inc., Purchase, N.Y., is responding to SEC concerns about an old “preferred program” for money managers by agreeing to give up more than $2.8 million in program revenue and interest; pay a $1 million fine to the U.S. Treasury; and hire an independent consultant to come up with recommendations about ways to improve IFMG’s mutual fund and variable insurance product revenue-sharing arrangements and disclosures.

The SEC has described the settlement in an order imposing the sanctions and requiring IFMG to do a better job of disclosing revenue-sharing arrangements.

Representatives for Sun Life were not immediately available to comment on the settlement.

The SEC says IFMG, a unit of Sun Life Financial Inc., Toronto, failed to provide adequate disclosure of a preferred program revenue-sharing system that was in place from January 2000 through November 2003.

The program included 5 mutual fund families and between 6 and 12 manufacturers of variable insurance products, according to the SEC.

The fund companies paid IFMG fees ranging from 0.1% to 0.18% on new sales and between 0.03% and 0.05% on the funds’ assets under management, the SEC says.

Sales of the fund from the preferred families accounted for 87% of IFMG fund sales in 2003, up from 81% in 2000, the SEC says.

The variable insurance product manufacturers paid IFMG 0.1% to 1% on sales of new contracts, with an average payment of 0.5%, the SEC says.

IFMG eventually reduced the commissions it paid to registered representatives for the sale of non-preferred products 33%, the SEC says.