Conseco Inc. has agreed to postpone further action on its recent demand for additional premium payments from some holders of universal life insurance policies.
The suspension was in response to an Iowa Division of Insurance order directing Conseco Life Insurance Company, a subsidiary of Conseco, Carmel, Ind., to stop demanding the payments.
Conseco disputes the order to stop demanding additional premiums but has agreed to stay its demands to give the state’s regulators time to investigate the matter, according to papers filed by the Iowa division. The stay would apply nationwide until March 31, 2009, according to the division.
The division had issued a cease-and-desist order against Conseco earlier this month after receiving complaints from some residents that the company was demanding extra payments on Conseco Life trend UL policies they had purchased.
Some agents who had sold the policies also complained about the demand, the Iowa division said at the time.
Conseco said it asked for the extra payments after it found that an administrative error had allowed the policies to continue even though premium charges were insufficient. Conseco told the policyholders their policies were subject to additional mortality charges and expenses because of the error.
The company had asked 168 UL policyholders in Iowa to pay premium increases of 40% to 60%, according to Iowa officials.
Conseco’s suspension of its claim for the added payments will apply nationwide, according to papers filed this week by the Iowa division.
Conseco also will refrain from sending further premium shortfall notices or attempting to collect any shortfall amounts, and the company agreed to postpone its request for an insurance division hearing on the matter and to refrain for the time being from seeking judicial remedies, officials say.
The policies in question had been sold by Massachusetts General Life Insurance Company and Philadelphia Life Insurance Company, companies that Conseco acquired in 1996.