Focused Information Service (Press Releases)
Superintendent of Monetary Providers Linda A. Lacewell in the present day introduced that the Division of Monetary Providers (DFS) has fined American Progressive Life and Well being Insurance coverage Firm of New York $260,000 for rescinding sure life insurance coverage insurance policies with out the consent of policyholders.
“American Progressive took the ability of alternative from shoppers into their very own palms – an unacceptable and unlawful plan of action,” stated Superintendent Lacewell. “We count on insurers to play by the principles and the Division will take motion to make sure they do.”
A DFS investigation ensuing from a client grievance discovered that from 2010 to 2019 American Progressive rescinded diminished paid-up life insurance coverage insurance policies with a money worth of $500 or much less and paid the money worth to 260 policyholders with out the consent of the policyholders, in violation of New York Insurance coverage Legislation. The recognized insurance policies initially had a complete face quantity of $2,333,438 and whole diminished paid-up demise advantages of $32,945.
Underneath in the present day’s order, American Progressive will current a remediation for restitution plan to policyholders or their beneficiaries for every violation. Underneath the plan, American Progressive will determine insurance policies that it rescinded with out consent of the policyholders. The corporate will give these policyholders the choice of selecting to place their insurance policies again in drive with out searching for to recoup any funds paid out as a part of the unauthorized rescissions of the insurance policies. As a substitute, shoppers could obtain a further cost reflecting the distinction between the give up worth beforehand paid and the diminished paid-up demise profit.
A duplicate of the consent order (https://www.dfs.ny.gov/system/recordsdata/paperwork/2019/09/ea190917_american_progressive.pdf) could be discovered on the DFS web site.