The California Department of Insurance has announced an agreement with a firm that sells life insurance products to active-duty members of the U.S. armed forces.
Trans World Assurance Company, San Mateo, Calif., has agreed to a settlement that calls for it to sell only life insurance policies that comply with California’s new Military Insurance Sales Regulation, officials say.
Trans World also has agreed to recalculate and pay interest as required by law and to repay withdrawal charges, officials say.
Before the regulations were adopted, Trans World sold universal life policies designed so that insurance premiums were deducted automatically from a savings account. The new regulations no longer allow the use of the automatic payment mechanism.
Trans World notes that it did not to admit to any wrongdoing in the California settlement agreement, and that it voluntarily eliminated the prohibited automatic payment provisions and before the California department began administrative proceedings.
Trans World says it also made refunds to consumers affected by the regulatory changes before California took action.
“Trans World did this even though it believed the regulations to be unfair to those serving in the military, treated them differently than its normal civilian counterparts, and felt that the changes could be harmful to the individuals,” the company says.