The Florida Office of Insurance announced it has entered into consent agreements with 2 insurers settling charges over life insurance policies told to military personnel.

American Fidelity Life Insurance Co., Pensacola, Fla., and Trans World Assurance Co., San Mateo, Calif., resolving allegations filed against them by the office last January. American Fidelity agreed to pay $75,000 in penalties, costs, and fees, while Trans World agreed to pay $175,000, according to the department.

The agreements resolve American Fidelity’s and Trans World’s sale of a Flexible Dollar Builder Life Insurance Policy to active-duty armed services members. The policy included an accumulation fund that failed to credit interest properly, contained an early withdrawal penalty and provided for automatic premium payments from deposits in the accumulation fund, the office said.

The office found that American Fidelity and Trans World did not conduct meaningful needs assessments for the policy and failed to provide effective rates of return to policyholders.

In addition to the penalties, costs and fees, American Fidelity and Trans World have issued refunds to its policyholders. American Fidelity and Trans World also refiled their policies and are now in compliance with Florida law, the department said. American Fidelity and Trans World will also use an approved needs-assessment form for future military sales, it added.

Marilyn Hess, president of American Fidelity and a member of the board of directors of both companies, said she was “confused” by the statement issued by Florida’s insurance office about the settlement. That statement “doesn’t mirror what we think is our agreement with the department,” Hess says.

She says the issue involved a “technical aspect” of forms and affected 13 policies it had sold. The company returned a total of less than $300 to all of the affected policyholders, she says. [An earlier version of this article incorrectly stated that each affected policyholder received about $300.]

“We very much objected to what the department believes but settled because we want to put this in our past,” Hess says.

Hess said the issue involved a “forms violation” and that both companies have refiled the policies in question to comply with Florida rules.

Although Hess is a director of both insurers, and both were founded by the late Charles Putnam Woodbury, the 2 companies are independent, she says.