John Hancock Life Insurance Company (U.S.A.), along with its subsidiary broker-dealer, has agreed to refund senior citizens in Massachusetts more than $550,000 to settle allegations that it failed to supervise one if its representatives, permitting him to sell unsuitable variable life insurance policies, variable annuities and other insurance and financial products.
The settlement with Massachusetts Attorney General Martha Coakley also requires Hancock to make 145 additional refund and penalty waiver offers to consumers, primarily seniors, who purchased certain variable annuities and variable life insurance policies from its representative.
John Hancock also will make a payment of $165,000 to Massachusetts.
According to prosecutors, the Hancock representative developed an association with a mortgage broker from a separate company to induce senior clients to take out reverse mortgages and invest the proceeds in unsuitable variable annuities. The government alleged that Hancock unfairly failed to effectively supervise its representative’s marketing and sales practices before terminating him.