News: 2010 Press Release
For Release: June 30, 2010
Media Calls Only: 916-492-3566
Commissioner Poizner Announces $11 Million Multi-State Settlement with Conseco Life Insurance Company
Insurance Commissioner Poizner announced today a multi-state, multi-million dollar settlement with Conseco Life Insurance Company. The settlement requires the establishment of a $10 million fund for certain owners of its Lifetrend life insurance policies, and provides policyholders with significant options for maintaining coverage. Participation in the settlement is voluntary.
"Insurers have to know that we are always watching them to protect consumers and make sure they are following the law," said Commissioner Poizner. "Because of this settlement, Conseco's Lifetrend policyholders in California and across the country will now have real choices for the continuation of their policies."
California, Iowa, Indiana and Texas participated in the settlement, which was led by the Florida Office of Insurance Regulation. Of the 12,247 Lifetrend policies that remain in force, approximately 3,000 are owned by Californians.
In addition to the settlement fund, Conseco will pay a $1 million monetary assessment to the jurisdictions participating in the settlement. California's share of the assessment will be approximately $80,000, based on a formula outlined in the agreement.
The multi-state settlement agreement is the result of an ongoing multistate market conduct examination. The examination specifically reviewed the sales, administration and management of Lifetrend policies and included the following issues for determination:
- Whether any marketing or advertising materials used by Conseco Life or its predecessors for the Lifetrend policies contained any false or misleading information;
- Whether Conseco Life or its predecessors engaged in sales practices that misrepresented the benefits, advantages, or terms of the Lifetrend policies;
- Whether any communication by Conseco Life or its predecessors was misleading to Lifetrend policy owners;
- Whether the Company had failed to properly manage or administer the Lifetrend policies; and
- Whether Conseco Life and its predecessors properly determined expense charge increases made to the Lifetrend policies.
The five state regulators alleged that violations have occurred related to the above issues. Conseco Life has not admitted or conceded any actual or potential fault, wrongdoing or liability in connection with any facts or claims that have been or could have been alleged against it.
The agreement also includes monitoring, examination and company reporting requirements for approximately five years. Beginning in July, the company will mail written notification of the settlement and optional benefit information to impacted policyholders.
A copy of the regulatory settlement agreement can be found by selecting this link.
Please visit the Department of Insurance Web site at www.insurance.ca.gov. Non media inquiries should be directed to the Consumer Hotline at 800.927.HELP. Callers from out of state, please dial 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.
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