The Financial Industry Regulatory Authority has imposed a $100,000 fine on an insurer-affiliated investment firm over a former broker’s strategy for selling variable universal life insurance.
Ameritas Investment Corp., Lincoln, Neb., a unit of UNIFI Mutual Holding Company, Lincoln, Neb., has agreed to pay the fine to resolve FINRA’s concerns.
From October 2003 to December 2005, the former broker urged consumers to take out additional mortgage debt or home equity debt to buy VUL policies, FINRA officials say.
The broker recommended the mortgage debt-funded VUL arrangements as vehicles for saving for college expenses and retirement, officials say.
When FINRA learned about the arrangements, it found that the broker’s financial plans were misleading and that some of her VUL purchase recommendations were unsuitable. FINRA fined the broker $60,000 and suspended her for 9 months, officials say.
About 90 of the 220 consumers who received the broker’s plans ended up buying VUL policies from Ameritas, and 6 of the VUL policy sales were found to be unsuitable, officials say.
FINRA sanctioned Ameritas for failing to adequately supervise the broker and for advertising violations related to the financial plans, officials say.