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FOR IMMEDIATE RELEASE NAIC MEMBERS REACH MULTI-STATE AGREEMENT WITH AMERICAN-AMICABLE LIFE INSURANCE COMPANIES KANSAS CITY, Mo. (Aug. 3, 2006) – More than 40 state insurance departments collaborated through the National Association of Insurance Commissioners (NAIC) to sign a multi-state regulatory settlement with three Waco, Tex.-based life insurance companies involved in the improper sale of insurance and investment products to U.S. military service members. Currently, 42 states, the District of Columbia and Guam have signed the settlement agreement, which became effective on July 28, 2006. The settlement requires American-Amicable Life Insurance Company of Texas and its two affiliates, Pioneer American Insurance Company and Pioneer Security Life Insurance Company, to provide immediate cash refunds and increased policy benefits totaling $70 million to their approximately 92,000 policyholders. Of those policyholders, 57,000 current and former service members will receive cash refunds and modifications to their existing insurance policies, if active. An additional 13,000 service members and 22,000 civilians will receive increased cash surrender benefits. “The NAIC is dedicated to consumer protection and state-based regulation, which oftentimes involves a multi-state network and partnership,” said Alessandro Iuppa, NAIC President and Maine Superintendent of Insurance. “This settlement agreement, signed by a majority of our member states, highlights the positive effects of states working together to provide the insurance consumer with protection, allowing them to have trust in the policies they are sold.” The settlement agreement, which culminates a 20-month investigation led by the Texas and Georgia insurance departments, the U.S. Department of Justice and the U.S. Securities and Exchange Commission, alleges that the American-Amicable companies violated insurance and consumer protection statutes in the sale and marketing of certain life insurance products to U.S. service members. The term life policies were sold primarily to military personnel and often represented as investment products. “This settlement is historic in that it includes not only state insurance regulators, but federal agencies, including the U.S. Department of Justice and the U.S. Securities and Exchange Commission,” said Georgia Insurance Commissioner John Oxendine. “This agreement shows that regulators, both national and state, are united in protecting our military personnel, many of whom are young and financially inexperienced, from deceptive or unfair sales practices.”
About the NAIC Headquartered in Kansas City, Missouri, the National Association of Insurance Commissioners (NAIC) is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and the five U.S. territories. The NAIC’s overriding objective is to assist state insurance regulators in protecting consumers and helping maintain the financial stability of the insurance industry by offering financial, actuarial, legal, computer, research, market conduct and economic expertise. Formed in 1871, the NAIC is the oldest association of state officials. For more than 135 years, state-based insurance supervision has served the needs of consumers, industry and the business of insurance at-large by ensuring hands-on, frontline protection for consumers, while providing insurers the uniform platforms and coordinated systems they need to compete effectively in an ever-changing marketplace. For more information, visit NAIC on the Web at: http://www.naic.org/press_home.htm
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2006 National Association of Insurance Commissioners. All rights reserved. |
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