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June 12, 2018 at 05:49 PM
The California Department of Insurance said today that it wants to shut two life insurers down for a year because of problems with life insurance policy administration.
Department officials say, in an order listing accusations against Accordia Life and Annuity Company and Athene Annuity and Life Company, that the companies have failed to meet California service standards for about 50,000 policies issued to California residents.
(Related: Dave Jones Takes Over as California Commissioner)
Since early 2016, the California department has received more than 100 consumer complaints related to problems with administration of the policies, officials say in the order.
A copy of the order is available here.
The Accordia-Aviva USA Deal
The company now known as Accordia, which was previously known as Presidential Life, is a subsidiary of Commonwealth Annuity and Life Insurance Company.
Commonwealth, in turn, is an Iowa-based subsidiary of Global Atlantic Financial Group Ltd. of Bermuda.
Athene, which was formerly known as Aviva USA, is an Iowa-based subsidiary of Athene Holding Ltd. of Bermuda.
Commonwealth agreed to have Accordia assume responsibility for a block of Aviva USA’s life business in May 2013, while Athene Holding’s acquisition of Aviva USA was pending, according to the California department’s order.
Accordia hired an outside company to administer the old Aviva USA policies. The new administrator pulled one wave of about 264,000 policies into its own systems, and a second wave of about 278,000 policies into its systems, California department officials say in the order.
Restricted Status
During the system migration process, the policies “were placed in a ‘restricted’ status, such that they could not be administered electronically and could only be administered on a manual basis,” officials say. “While a policy is restricted, policy values cannot be brought up to date; annual statements and policy illustrations cannot be generated electronically; premium billings and payments cannot be processed; and financial and non-financial transactions requests cannot be timely fulfilled.”
At least several hundred California policies are still restricted, officials say.
“Accordia maintains that an unknown number of policies will forever remain restricted and must be manually administered,” officials add.
As a result of the migration issues, Accordia failed to send all policyhyolders the annual policy reports required by California insurance law, officials say.
