Bankers Life To Pay $1.5M Penalty for Improper Annuity Sales in Wisconsin
July 29, 2010 by N/A
July 29, 2010 | States News Service
Copyright 2010 States News Service States News Service
July 28, 2010 Wednesday
599 words
INSURANCE COMMISSIONER ANNOUNCES ANNUITY COMPANY BANKERS LIFE AND CASUALTY TO PAY RECORD $1.5 MILLION PENALTY
States News Service
MADISON, WI
The following information was released by the Wisconsin Office of the Commissioner of Insurance:
Wisconsin Insurance Commissioner Sean Dilweg announced that Bankers Life and Casualty Company (Bankers) settled an investigation by paying a record $1.5 million dollar forfeiture and offering a restitution program to 5,700 mostly senior Wisconsin annuity purchasers. Bankers, headquartered in Chicago, settled an Office of the Commissioner of Insurance (OCI) investigation of allegations of numerous unsuitable annuity sales and do not call list and home solicitation violations.
“This settlement protects Wisconsin consumers,” said Dilweg. “Bankers’ license is on the line for compliance.”
The settlement agreement requires Bankers to establish a comprehensive supervision and training program to ensure its agents and branch managers comply with annuity suitability, do not call and home solicitation laws. Bankers agreed that the Office of the Commissioner of Insurance may revoke its license to do business in Wisconsin if it is determined to have materially violated the settlement agreement. The Bankers settlement includes the requirement to comply with Wisconsin’s new, strengthened annuity sale supervision regulation signed into law by Governor Jim Doyle on May 13, 2010.
U.S. Senator Herb Kohl, chair of the Senate Special Committee on Aging recently initiated an inquiry into Bankers annuity sales practices. In addition to his examination of Bankers sales practices, Senator Kohl successfully fought for inclusion of provisions in the recently adopted federal financial reform legislation to strengthen state enforcement of annuity suitability requirements.
Bankers denies violating Wisconsin law. In addition to consenting to the order, Bankers changed management at its Madison, Janesville and Wausau branch offices during the OCI investigation and began to implement new sales supervision practices. Bankers’ annuity owners or beneficiaries who were sold annuities from January 1, 2004, to July 26, 2010, through the Bankers’ branch offices in Madison, Janesville and Wausau, and certain other annuity owners, will receive mailed notices of their right to request a review of the sale by an independent firm. Consumers will be offered restitution according to the terms of the settlement agreement if the sale is found to be unsuitable or improper. OCI expects notice of the restitution program will be mailed to consumers this fall.
OCI reminds consumers to take care responding to letters, postcards or unsolicited calls offering free Medicare or other information. A response may open the door for an annuity sales pitch. Consumers should work with an insurance company directly or with a reputable insurance agent for all their insurance needs. Consumers who have a complaint regarding any insurance company or insurance agent, including any matter related to Bankers, may contact OCI for assistance at 1-800-236-8517.
A copy of the Commissioner’s Stipulation and Order is available for viewing at http://oci.wi.gov/orders/10c33210.pdf. Consumers interested in obtaining a copy of free publications from OCI can visit the OCI Web site at oci.wi.gov, write to OCI Publications, P.O. Box 7873, Madison, WI 53707-7873, or call 800-236-8517.
Created by the Legislature in 1871, Wisconsin’s Office of the Commissioner of Insurance (OCI) was vested with broad powers to ensure that the insurance industry responsibly and adequately met the insurance needs of Wisconsin citizens. Today, OCI’s mission is to lead the way in informing and protecting the public and responding to its insurance needs.
July 28, 2010
