NEW YORK (WWTI) — A major life insurance company will pay New York State million of dollars in fines for violating regulations.
New York State Superintendent of Financial Services Linda A. Lacewell announced on Tuesday that the Department of Financial Services has entered a consent order with New York Life Insurance & Annuity Corporation for violating New York Insurance regulations.
New York Life Insurance and Annuity will be required to pay $5.4 million in restitution to New York State consumers and $5,529,000 in penalties.
These charges follow an investigation led by the DFS which found that NYLIAC failed to properly disclose to consumers income comparisons and suitability information. According to the DFS, this caused consumers to exchange more financially favorable deferred annuities with immediate annuities. Annuities are contracts between life insurance companies and consumers that provide guaranteed payments for the remainder of an individual’s lifetime or for a specified period.
Additionally the DFS reported that many New York consumers received incomplete information regarding the replacement annuities, resulting in less income for identical or substantially similar payout options.
“The Department remains committed to protecting New York’s families, especially our vulnerable seniors, from being misled as they seek to secure their retirement income during these challenging times,” said Superintendent Lacewell. “Today’s settlement will deliver significant monetary restitution and relief to consumers during the ongoing pandemic and serves as a reminder to New York’s life insurers that they must put consumers’ best interests first and comply with DFS regulations.”
DFS’ industry-wide investigation remains ongoing. A full copy of the consent order between the Department of Financial Services and New York Life Insurance & Annuity Corporation can be read online.