An unpleasant situation involving
Conseco Life has been resolved, with the US insurer agreeing to
reimburse aggrieved holders of its Lifetrend universal life
product.
Under the settlement, Conseco Life will
establish a $10m fund for aggrieved policyholders and pay a $1m
penalty to states participating in the settlement.
Go deeper with GlobalData
The issue first came under the scrutiny of the
Florida Office of Insurance Regulation (FOIR) in December 2008.
According to FOIR, at issue was Conseco’s notification of 5,000
Lifetrend policyholders in Florida in October 2008 informing them
of an increase in their “monthly cost of insurance rates and
expense charges.”
In November 2008, 4,500 of the policyholders
were also told their policies were under-funded and they must
submit payments for the “shortfall”.
FOIR accused Conseco of mismanagement.
At the time Conseco stated: “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.”
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By GlobalDataFOIR led the settlement, which involves up to
12,247 policyholders, on behalf of insurance regulators in 37
states.
Conseco Life is a unit of CNO Financial
Group.
