A group of 37 states and other jurisdictions negotiated a multi-state settlement agreement involving interest-sensitive whole-life policies.
Insurance regulators from California, Florida, Indiana, Iowa and Texas led efforts to come to terms with Conseco Life Insurance Company, a unit of CNO Financial Group Inc., Carmel, Ind. (NYSE:CNO).
The settlement affects consumers who bought Lifetrend whole-life policies from Conseco Life from 1978 to 1997.
Some marketing materials prepared for agent-use only used terms such as “vanishing premiums” and “paid-up policies,” according to a copy of the regulatory settlement agreement posted by the California Department of Insurance.
The Conseco Life administrative system did not account accurately for the performance of the policies, and it failed to generate premium notices for some policyholders who ended up with obligations to pay premiums, according to the agreement.
In October 2008, Conseco Life told policyholders that they would have to make flexible premium payments to keep the policies in force.
Regulators received complaints from policyholders and looked into the possibility that there were problems with Conseco Life marketing or administrative practices.
“Conseco Life does not admit or concede any actual or potential fault, wrongdoing or liability in connection with any facts or claims that have been or could have been alleged it,” according to the settlement agreement.