Six Life Insurers To Pay N.Y. $1.8 Million For Annuity Sale Violations

Six life insurance companies have agreed to pay New York $1.8 million to settle allegations that they conducted deferred to immediate annuity replacement transactions that violated state regulations. "These six carriers failed to properly disclose to consumers income comparisons and suitability information, causing consumers to exchange more financially favorable deferred annuities with immediate annuities," the New York Department of Financial Services said in a press release today. The annuity replacement transactions resulted in less income for consumers for identical or substantially similar options, the department added.  Last year DFS issued a regulation that ensures recommendations related to life insurance and annuities are in the best interest of the consumer and appropriately address the insurance needs and financial objectives of the consumer at the time of the transaction. These are the insurance companies that were cited for the violations, followed by the consumer restitution and penalty, respectively, that they agreed to pay: Companion Life Insurance Co., $462,122, $186,000; Guardian Insurance & Annuity Company Inc., $218,589, $224,000; Northwestern Mutual Life Insurance Co., $31,937, $26,000; The Penn Mutual Life Insurance Co., $322,584, $133,000; The Prudential Insurance Company of America, $14,020, $35,000; and The U.S. Life Insurance Company in New York City, $102,902, $69,000. The insurers will collectively pay $1.15 million in restutition and $673,000 in penalties, the department said. As part of the agreements, the department said, many state consumers will receive additional restitution in the form of higher monthly payout amounts for the remainder of their contract terms.

from FA News https://www.fa-mag.com/news/six-life-insurers-to-pay-n-y---1-8-million-for-annuity-sale-violations-51831.html