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.
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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.