An insurer has resolved a Nutmeg State investigation involving concerns about compensation paid to brokers who sold single-premium group annuities.
Mutual of Omaha Insurance Company, Omaha, Neb., says it has agreed to a settlement negotiated with Connecticut Attorney General Richard Blumenthal.
Mutual of Omaha will establish a $1.5 million fund to refund premiums to plan sponsors who bought a Mutual of Omaha SPGA policy through a broker between 1999 and 2004 if Mutual reimbursed broker expenses under an expense reimbursement agreement or paid an override commission to the broker under an administrative services agreement, the company says.
Mutual of Omaha also will pay a $195,000 penalty to the state of Connecticut, the company says.
Blumenthal began investigating Mutual of Omaha because of concerns about disclosure of compensation paid to some single-premium group annuity brokers who sold the annuities in Connecticut from 1999 to 2004, Mutual of Omaha says.
Mutual of Omaha notes that it always disclosed the overall cost of the annuities being purchased, and that the overall cost totals always included the cost of the compensation paid to the brokers.
“Mutual competed for its customers’ business on the basis of overall cost, our company’s financial stability, our excellent service and customer satisfaction,” John Fischer, a Mutual of Omaha vice president, says in a statement. “To our knowledge, we were the lowest bidder for every SPGA policy that we issued.”