Maria Vullo (Photo: NYDFS)
The New York State Department of Financial Services has imposed a $6.3 million fine on a life insurer, over allegations that the insurer used improper reinsurance transactions involving an affiliate to minimize term life reserves.
The department imposed the fine on William Penn Life Insurance Company, a unit of Legal & General America, which is a U.S. unit of Legal & General Group PLC.
(Related: Life Settlement Investors Head to New York)
The department said earlier this month that, from 2014 through this year, William Penn used reinsurance from a reinsurer that then passed on term life risk to William Penn's parent, Legal & General Assurance Society.
William Penn did not get New York department approval for the arrangement, and William Penn reported the reinsurance arrangement in a way that made its financial statements inaccurate, the department said.
Maria Vullo, New York state's financial services superintendent, said in a statement that the department must verify the fairness of an insurer's financial transactions with affiliates.
