Three insurers agreed to pay more than $2 million in restitution and penalties to New York for annuity replacement transactions that violate the state’s new best-interest standard.
State Department of Financial Services Superintendent Linda A. Lacewell announced the three consent orders with Lincoln Life & Annuity Company of New York, MassMutual Life Insurance Company, and Pacific Life & Annuity Company. The insurers, collectively, will pay $1,084,407 in restitution to New York State consumers, plus $934,000 in penalties.
“The Department is committed to protecting the families of New York, especially our vulnerable seniors, from being misled as they seek a safe and stable retirement income,” Lacewell said. “Today’s settlements provide a measure of monetary restitution, especially important during the COVID-19 pandemic, and are a reminder that all New York’s life insurers must comply with DFS regulations and act in the consumer’s best interest.”
DFS’ investigation found that the three carriers failed to properly disclose to consumers income comparisons and suitability information, causing consumers to exchange more financially favorable deferred annuities with immediate annuities, DFS said in a news release.
Many New York consumers received “incomplete information regarding the replacement annuities, resulting in less income for identical or substantially similar payout options,” the department added…Read more>>