Regulatory effort concludes with settlement and restitution to injured Vermonters
Montpelier, VT – The State of Vermont received $600,000 in penalties as part of a stipulation and consent agreement with Bankers Life and Casualty Company after a multi-year market conduct investigation that revealed sales of unsuitable insurance products to older Vermonters. Stephen W. Kimbell, Commissioner of Financial Regulation made the announcement, adding that in addition to the fine, Bankers Life returned $77,000 in restitution to Vermont customers.
"This settlement represents significant work by the Department’s Insurance Division to stop companies from selling unsuitable insurance products, especially annuities, to Vermonters – particularly to older Vermonters,” said Commissioner Kimbell. An annuity is an insurance contract that is created when an individual gives a life insurance company money which may grow on a tax-deferred basis and then can be distributed back to the owner, either immediately or over a period of time.
As a condition of the Order issued by the Department, Bankers Life agreed to institute an annuity and life insurance suitability program, be subject to yearly audits by the Department and train all Vermont-licensed producers and managers quarterly to comply with Vermont law and regulations.
The Insurance Division concluded that the company did not consider the financial needs of its customers and failed to recommend suitable products for their individual circumstances.
Commissioner Kimbell explained, “certain types of annuities typically cannot be used for immediate financial needs without paying substantial penalties. Bankers Life sold these types of annuities to customers who were in their 80’s and 90’s and therefore had limited means or ability to recover financially from ill-advised investments. Vermont seniors have worked a lifetime to accumulate their assets and we take our role in protecting them seriously.”
A copy of the Stipulation and Consent Order can be found on the Department’s website at: