Northwestern Mutual Fined in N.H. Over Marketing Emails

What You Need to Know

Company subsidiaries have agreed to pay $400,000 to settle two state cases.
Agents in New Hampshire sent misleading emails to prospects, some of whom lived out of state, regulators said.

Northwestern Mutual has resolved two state cases in New Hampshire that could influence how insurers and securities firms supervise email marketing campaigns.

The cases involve allegations that some agents in New Hampshire sent large numbers of marketing emails to prospective clients outside New Hampshire, and that some of the emails gave prospects inaccurate descriptions of the agents’ experience.

Northwestern Mutual Life Insurance has agreed to pay a $200,000 fine to the New Hampshire Insurance Department. Northwestern Mutual Investment Services, an affiliated broker-dealer, has agreed to pay a $175,000 fine along with $25,000 for investigative costs to the New Hampshire Bureau of Securities Regulation.

Northwestern Mutual representatives could not immediately be reached for comment. In the consent order with the securities bureau, the broker-dealer affiliate agreed not to dispute any findings in the orders, except in connection with litigation in which the state of New Hampshire is not a party.

The Allegations

Agent producers with Northwestern Mutual Life sent prospects tens of thousands of emails that “mispresented their experience and client base” from 2019 through 2021, according to the New Hampshire Insurance Department.

“Though respondent had electronic systems in place to monitor email communications, as well as training and guidance for insurance producers, these systems failed to stop the issuance of misleading emails,” officials said.

Northwestern Mutual Life has cooperated with investigators’ efforts to resolve the issues identified, officials noted.

Compliance Provision Details

The life insurance company consent order requires the company to improve its electronic email compliance system.

The consent order with the broker-dealer unit calls for the unit to look for a technological system that will help it find out when Northwestern Mutual reps are “sending similar advertising emails on a mass scale to prospects.”

The order also calls for the company to work with supervisors and reps to ensure that the company’s compliance team reviews any mass solicitation emails for false or misleading statements; and that registered reps solicit business only in states in which they hold securities licenses.