Minnesota regulators have accused an insurance agent of having a client buy about $128 million in life insurance with the intention of selling the policies in the stranger-originated life insurance market.
The Minnesota Department of Commerce says it has suspended the license of Michael Antonello, chairman of Wealth Management Advisors L.L.C., Golden Valley, Minn., and charged him and his agency with fraud and forgery.
The department has scheduled a hearing May 14 before Administrative Law Judge Bruce Johnson to consider the charges.
Antonello has denied the charges, and he says the practices he used when he sold the policies in question were in line with what were considered to be accepted procedures at the time.
“Once insurance companies better defined financial underwriting guidelines and replacement guidelines, we complied with these revised standards,” Antonello says. “However, our practices in the early days of the senior settlement industry appear to be examined through the prism of today’s more rigorous underwriting guidelines.”
The Minnesota department asserts in its order for summary suspension that Antonello obtained life insurance for a number of clients that substantially exceeded the clients’ net worth.
In one case, the department charged, Antonello secured 44 policies insuring the life of John Paulson from October 1999 to December 2004. The total value of the death benefits was $127,750,000.
The department says Antonello obtained the insurance from about a dozen carriers by misrepresenting the total amount of coverage already in force on Paulson’s life and by falsely claiming on some applications that policies already in force would be replaced by newer policies.
Antonello received large commissions from the sale of the policies and also profited from selling each of the policies to investors in the STOLI market after the 2-year period for contesting such policies had lapsed, the department alleges.