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February 6, 2009updated 13 Apr 2017 8:57am

Conseco concedes errors

Conseco and the Florida Office of Insurance Regulation (FOIR) have agreed to enter into discussions to resolve a particularly unpleasant situation the US life insurer finds itself in Discussions relate to serious accusations leveled against Conseco Life by the FOIR in December 2008 The FOIRs accusations relate to the insurers Lifetrend universal life product and include mismanagement and withholding information from the FOIR which has threatened Conseco with suspension or revocation of its licence to operate in the state.

By LII editorial

Conseco and the Florida Office of Insurance Regulation (FOIR) have agreed to enter into discussions to resolve a particularly unpleasant situation the US life insurer finds itself in. Discussions relate to serious accusations leveled against Conseco Life by the FOIR in December 2008.

The FOIR’s accusations relate to the insurer’s Lifetrend universal life product and include mismanagement and withholding information from the FOIR which has threatened Conseco with suspension or revocation of its licence to operate in the state.

According to the FOIR, a key issue was Conseco’s notification of 5,000 Lifetrend policyholders in October 2008 informing them of an increase in their “monthly cost of insurance rates and expense charges.”

In November last year, 4,500 of the policyholders were also told that their policies were under-funded and that they must submit payments for the “shortfall” no later than 3 January.

The FOIR’s accusation of mismanagement appears supported by a response published by Conseco.

“Due to an administrative platform issue at Conseco Life, some policyholders, over a period of years, paid lower premiums, or no premiums, because they did not receive notice that additional premiums were due,” stated Conseco which stressed that no policyholder received diminished benefits under their contract because of the company’s error.

Conseco added that it has brought the issue to the attention of regulators, is working to correct it, and with concurrence of Conseco Life’s home-state regulator, the Indiana Department of Insurance, has implemented a 90-day nationwide moratorium on further action on Lifetrend policies.

Conseco and the FOIR have also agreed to enter discussions regarding issues related to Lifetrend policyholders resident in Florida.

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