Skip First Level Navigation | Skip All Navigation

Site Map   Search INS

Augusta, Maine -

Insurance Superintendent Mila Kofman announced Tuesday that Bankers Life and Casualty Company has agreed to pay a $500,000 civil penalty for improper sales practices and inadequate sales force training. Additionally, the Company has agreed to offer refunds plus incurred interest to any consumers who answered Medicare solicitations and were then sold other Bankers Life insurance products.

“We do not tolerate unlawful insurance sales practices in Maine, and we find it especially egregious when seniors or other vulnerable populations are targeted,” Superintendent of Insurance Kofman stated. “In this case, the improper sales practices were the result of inadequate training and the company has accepted responsibility and agreed to make all affected consumers whole.”

The agreement concludes an investigation by the Bureau of Insurance and the Office of the Attorney General resulting from a complaint to the Bureau of Insurance by an 80-year-old consumer who had answered a mailing from Bankers Life offering “an important booklet concerning your latest Medicare Hospital and Medical benefits and deductibles.” The consumer met with two Bankers Life agents in her home. She was persuaded to use $37,000 of the $42,000 in her bank account to purchase an annuity.

Concerns about these “cross-selling” tactics led the Maine Legislature to pass a law in 2007 prohibiting insurance agents from making appointments to discuss Medicare products and using them to solicit business for annuities, life insurance or health insurance products. Bankers Life admitted that it failed to properly train its agents about Maine’s cross-selling law.

In addition to the $500,000 civil penalty and refund offer, Bankers Life has also agreed to an independent audit that will identify all sales of other products that resulted from Medicare appointments after the cross-selling law took effect. This will identify affected consumers, giving them the opportunity to cancel these transactions, and making them whole for any adverse tax consequences or other financial losses. Finally, Bankers Life has agreed to provide training in the new law for all of its sales representatives.

Consumers who believe they may have been subject to improper cross-selling by agents of Bankers Life and Casualty Company or other insurance providers may contact the Maine Bureau of Insurance at 800-300-5000 or online at www.maine.gov/insurance.

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.maine.gov/insurance; by calling 800-300-5000 in state; or by writing to Bureau of Insurance, 34 State House Station, Augusta ME 04333.

###

Last Updated: October 28, 2009 1:28 PM