Know Your Life Insurer before Buying

While it is not always easy to know everything there is to know about a company before buying from them, knowing some facts about your potential life insurance company is important.

The California Department of Insurance recently announced that it was part of a multi-state, multi-million dollar deal with Conseco Life Insurance Co.

The settlement mandates the establishment of a $10 million fund for some owners of its Life trend life insurance policies, and allocates policyholders with significant options for keeping coverage. The department notes that participation in the settlement is entirely voluntary.

According to California Insurance Commissioner Steve Poizner, "Insurers have to know that we are always watching them to protect consumers and make sure they are following the law. Because of this settlement, Conseco's Life trend 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 Life trend policies that remain in force, about 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 in the area of $80,000, due to 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 Life trend policies and included the following issues for determination:

Whether any marketing or advertising materials used by Conseco Life or its predecessors for the Life trend 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 Life trend policies;

Whether any communication by Conseco Life or its predecessors was misleading to Life trend policy owners;

Whether the Company had failed to properly manage or administer the Life trend policies; and

Whether Conseco Life and its predecessors properly determined expense charge increases made to the Life trend 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.

If you are looking at buying life insurance, be sure to do some research on the prospective companies so you know what you're getting into.