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MAINE BUREAU OF INSURANCE
April 14, 2005
Augusta, Maine: Superintendent of Insurance Alessandro A. Iuppa today announced that Bankers Life & Casualty Company of Illinois (Bankers Life) has been fined $400,000 for failing to provide adequate training and supervision for its appointed producers in the South Portland and Bangor, Maine, branch sales offices. As a result of the findings, Bankers Life must also invest $100,000 in organizations and initiatives that benefit Maine’s senior citizens.
The resolution negotiated by the Bureau of Insurance will provide restitution to Maine consumers who have been harmed by Bankers Life producers. Bankers Life will work with the Bureau to determine the best approach for providing restitution. The precise amount of restitution has yet to be determined, given the various options for rectifying inappropriate sales.
Between January 1, 2002, and April 11, 2005, the Maine Bureau of Insurance received 70 formal complaints against Bankers Life alleging violations of Maine law. These included policy misrepresentation, making false statements regarding the company’s financial condition, and making deceptive or misleading representations. The complaints concerned the sale of life, annuities, and health insurance.
“Bankers Life producers displayed a deplorable lack of regard for complying with Maine law. The substantial number and the nature of the consumer complaints received by the Bureau shows an unacceptable level of incompetence in selling policies to elderly Maine customers. The company must take serious measures to develop and ensure that a strong attitude of compliance becomes the company’s philosophy going forward. Maine law holds insurers responsible for injuries to consumers that result from the actions of their appointed producers,” said Superintendent of Insurance Alessandro Iuppa.
Bankers Life has agreed to an extensive corrective and preventative plan. It includes producer training in the company’s products; training in product suitability, replacement and disclosure; a revised complaint handling process; an examination of each of the Maine branch sales offices by an independent auditor; and a survey of a random sample of policyholders to establish whether the insureds understand the product purchased and their overall satisfaction with the sale.
“Bankers Life will have to undertake a comprehensive and fairly costly process to address these issues,” said Iuppa. “The corrective plan reinforces the message to insurers that the Bureau is serious about enforcing violations of Maine law.”
“Bankers Life expressed a willingness and desire to take steps necessary to correct the harm caused by some of its captive agents and to repair any damage to insureds and the senior community in Maine,” stated Iuppa. “The measures to which Bankers Life has agreed are substantial and indicate a commitment to change an unacceptable culture that has developed in the Maine branches. By taking this approach, the Bureau has met its regulatory responsibility and is assuring a healthy Maine marketplace.”
The Bureau of Insurance is part of the Department of Professional and Financial Regulation, which encourages sound ethical business practices through high quality, impartial and efficient regulation of insurers, financial institutions, creditors, investment providers, and numerous professions and occupations for the purpose of protecting the citizens of Maine. Consumers can reach the Bureau through its Web site at www.MaineInsuranceReg.org; by calling 800-300-5000 in state; or by writing to Bureau of Insurance, 34 State House Station, Augusta ME 04333.
Last Updated: May 24, 2011
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