The Wisconsin insurance commissioner’s office has negotiated a settlement with an insurer in connection with allegations of unsuitable annuity sales.
The insurer, Pennsylvania Life Insurance Company, Lake Mary, Fla., a unit of Universal American Corp., Rye Brook, N.Y., has agreed to pay a $925,000 forfeiture and to offer an independent review program to 2,200 Wisconsin annuity buyers, Wisconsin officials say.
If outside reviewers find that a consumer’s annuity purchase was the result of improper sales practices, “the consumer will be offered remediation,” officials say.
Penn Life also has agreed to an order that prohibits it from selling annuities in Wisconsin for 4 years and requires it to supervise its insurance agents more closely, officials say.
Penn Life sold the annuities involved in the settlement agreement from 2000 to 2007.
Starting in 2006, consumers told Wisconsin insurance regulators that some agents selling Penn Life annuities had made misleading sales representations or sold unsuitable annuities, officials say.
Wisconsin insurance regulators took action against the agents, and then took action against Penn Life.
In addition to annuity sales, the settlement agreement addresses sales practices involving Universal American subsidiaries’ sales of long term care insurance policies, Medicare Advantage and Medicare Part D plans, and Medicare supplement policies, officials say.
Penn Life is happy to bring the Wisconsin matter to a close, according Steve Carlton, a company compliance officer.
“Pennsylvania Life strives to recruit and train the best agents in the industry,” Carlton says in a statement. “As with all insurance companies, Pennsylvania Life is, unfortunately, not immune from having to discipline the small percentage of its agents with unscrupulous tendencies for their transgressions.”
Once Penn Life learned about Wisconsin regulators’ administrative actions against company agents, Penn Life terminated the agents, Carlton says.