Maria Vullo (Photo: NYDFS)
The New York State Department of Financial Services has imposed a $15 million fine on one life insurer in connection with premium notice and annual statement problems affecting about 15,000 policyholders, officials said today.
The department has also required another insurer to make remedial efforts that could have a total value of about $40 million insurers said.
The insurers involved, Athene Life Insurance Company of New York and First Allmerica Financial Life Insurance Company, entered into a consent order concerning the policies with the New York department, officials said.
Athene, which was formerly known as Aviva USA, is an Iowa-based subsidiary of Athene Holding Ltd. of Bermuda.
First Allmerica is a subsidiary of Commonwealth Annuity and Life Insurance Company, a reinsurance unit of Global Atlantic Financial Group Ltd. of Bermuda.
Athene Holding acquired Aviva USA in 2013. When Athene acquired Aviva USA, it had First Allmerica reinsure a block of life policies. First Allmerica hired another company to shift the Aviva USA policies to administration policies, Athene said in an announcement of the signing of the consent order.
New York state officials said in an announcement of the consent order that, from 2015 through 2017, after First Allmerica outsourced administration of the policies, Athene failed to ensure that all policyholders received the required premium due notices, cash surrender value notices, annual reports and annual privacy notices.
Athene Life Insurance Company of New York offered term life, whole life, universal life and indexed universal life products, according to a New York state market conduct examination report related to the consent order.
The company's primary distribution channel was through brokerage general agents.
Examiners found problems with a variety of advertising, sales and underwriting activities as well as with premium notices and annual notices, according to the market conduct examination report. Officials said, for example, that the insurer was unable to provide preliminary life application information for half of the eight term life files requested. The advisory notices in the files that were available failed to give applicants the required information about matters such as how to seek an unconditional refund for a new policy, officials said.
