The New York State Department of Financial Services (DFS) has imposed a monetary penalty of $15m against Athene Life Insurance Company of New York for violating state’s insurance law and regulations.
Together with Athene, First Allmerica Financial Life Insurance Company has signed a consent order with the New York regulators to take corrective actions amounting approximately $40m for similar violations.
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After complaints from customers, the regulator launched an investigation and found that Athene did not provide required information to nearly 15,000 policyholders, including premium notices, annual reports or cash surrender value notices, from 2015 to 2017.
The probe revealed that Athene failed to mail $81m in premium notices and provide other required information to policyholders.
First Allmerica Financial Life Insurance Company has administered all policies issued by Athene since 2015.
Financial Services Superintendent Maria Vullo said: “Insurers who outsource their responsibilities to third parties are still responsible to meet all of their obligations under the law.
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By GlobalData“Consumers must be able to trust that insurers are in compliance and are providing the required levels of service for life insurance policies.
“Given the increased frequency with which insurers use third-party providers, insurers will be held accountable for any failures to meet their legal obligations, even if that failure was the fault of a third-party provider.”
The violations took place following Athene surrendered almost all of its life insurance business through a series of reinsurance agreements to FAFLIC and signed administrative service agreements with FAFLIC related to those reinsurance agreements.
