SOURCE: www.ins.state.ny.us
Department Fines AXA Equitable $1.9 Million
New York State Insurance Superintendent james J. Wrynn today (3/26/10) announced that AXA Equitable Life Insurance Company has paid a $1.9 million fine for violations including making inaccurate or incomplete disclosures to consumers buying replacement annuity contracts and life insurance policies. The violations typically occurred when consumers surrendered existing annuities or life policies issued by other insurers and replaced them with AXA Equitable products.
The violations occurred starting January 2, 2001 and ended by June 30, 2006. Although the Department received no consumer complaints, a Department examination of AXA Equitable’s operations identified the violations.
Under the Department’s Regulation 60, companies are required to provide consumers with a disclosure statement in cases where the sale of a new policy will cause the buyer to surrender, lapse or in any way change the status of an existing policy. The purpose of Regulation 60 is to provide applicants for life insurance or annuity contracts with sufficient information to make an informed decision regarding whether an existing policy or contract should be replaced, thereby reducing the opportunity for misrepresentation and incomplete comparison in replacement situations. A disclosure statement must provide the insured with complete and accurate comparative information about significant features of the replaced and replacing policies or annuity contracts.
AXA was also found to have violated other provisions of the Insurance Law and Department Regulations from January 2, 2001 through December 31, 2005 including using an unapproved policy form in connection with its Equi-Vest product; failing to provide information required for accelerated benefit claims to policyholders; failing to obtain written informed consent prior to subjecting the applicant to HIV-related testing; and failing to maintain required documents and information necessary to reconstruct claims in certain cases involving variable annuity claims.