Wisconsin insurance regulators have negotiated settlement agreements with two companies that sell life and annuity products.
Wisconsin Insurance Commissioner Sean Dilweg says Bankers Life and Casualty Company, Chicago, a unit of CNO Financial Group Inc., Carmel, Ind. (NYSE:CNO), has agreed to pay a $1.5 million penalty to resolve an Office of the Commissioner of Insurance (OCI) investigation of reports of unsuitable annuity sales and violations of do-not-call list and home-solicitation rules.
The settlement agreement requires Bankers Life to establish a comprehensive supervision and training program to ensure its agents and branch managers comply with annuity suitability rules and other rules, officials say.
A Bankers Life representative says the company is committed to staying in the Wisconsin retirement market for the long-term.
“We share the industry’s concern about annuity suitability and have cooperated fully with the OCI,” the Bankers Life representative says. “More stringent annuity suitability procedures have been developed over the last several years which, along with consistent monitoring, ensures strict adherence to state compliance requirements for annuity sales and marketing.”
Dilweg also has announced the Pennsylvania Life Insurance Company, Lake Mary, Fla., a unit of Universal American Corp., Rye Brook, N.Y. (NYSE:UAC), has agreed to pay $2.9 million in restitution to resolve concerns about 307 individuals who owned annuities or “asset enhancer” life insurance policies.
The product holders asked for remediation.
Pennsylvania Life has agreed to stop selling annuities in Wisconsin for until 2013, to comply with Wisconsin law regarding suitability and sales practices, and to supervise its insurance agents to ensure compliance with the law, officials say.
Pennsylvania Life denied any violation of law but consented to the settlement agreement and order, officials say.
Robert Waegelein, a company spokesman, says Universal American has sold the annuity unit and moved on.
“The settlement is very agreeable to us,” Waegelein says.