Wells Fargo bank employees without insurance agent licenses were supposed to refer customers to kiosks in the branches, and let customers interested in term life or renters insurance sign up for coverage on their own, according to officials at the California Department of Insurance.
In some cases, officials say, bank employees seem to have signed the customers up for simplified-issue term life policies without getting the consumers’ permission.
Department officials believe California bank employees signed customers up for at 187 unauthorized policies from Great-West Financial from 2010 through 2014, and 18 unauthorized policies from a unit of Prudential Financial Inc. from 2014 through 2016, according to a document the department filed with California Insurance Commissioner Dave Jones.
A copy of the pleading is available here.
Jones said in a statement that the department looked into the matter because of allegations former Prudential employees made in a whistleblower lawsuit.
Representatives from Prudential declined to comment on the allegations.
Stephen Gawlik, a spokesman for Great-West, said Great-West ended its life insurance distribution arrangement with Wells Fargo in 2014.
“At that time, we did not suspect any fraudulent activity on the part of Wells Fargo,” Gawlik said. “We ended the relationship because we did not believe the business model was effective. In instances where customers’ policies were rescinded [Great-West Financial] refunded their premium completely. All premiums paid were refunded for those policies.”
Wells Fargo said in its own statement that it suspended online referrals of the renters and simplified term life insurance products in December 2016, when it heard of allegations of problems, and started an internal review of the products involved.
“We have been cooperating with the [California] Department of Insurance (DOI) over the course of this year,” the company said. “We are sorry for any harm this caused our customers and we are making things right for them as part of an ongoing remediation. Wells Fargo announced we are exiting the property and casualty personal insurance business last month, and this change is unrelated to the DOI investigation. We will continue to make critical changes to our businesses and operations to better serve customers and build a stronger bank.”
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