An insurance company that engaged in unlicensed and unregistered brokerage activity in Maine and three other states has agreed to pay a $9.9 million settlement, the state Office of Securities said in a press release.
Chicago-based Bankers Life and Causality Co. must disburse the settlement among Maine, New Hampshire, Vermont and Missouri, where it had "dual agents" from 2005 to 2011.
"This settlement will protect Maine investors from the dangers of unlicensed securities activity and increase confidence in the securities industry," Securities Administrator Judith Shaw said in a press release.
Maine spearheaded a two-year, joint investigation with the other affected states and the North American Securities Administrators' Association into Bankers Life's activities. The group concluded Bankers Life engaged in unlicensed activities by affiliating with licensed brokers UVEST Financial Inc. and Proequities Inc.
The investigation revealed that Bankers Life received about $21 million by directing its affiliates' operations, training and sales techniques that used a "sales script" to market certain products and steer investors to Bankers Life annuity products.
Maine is expected to receive about $770,000 in penalties, fees and expense reimbursement. Shaw says $375,000 of the settlement will be used to cover the investigation costs, $260,000 will cover past licensing and registration fees, and $106,000 will cover state audits to ensure compliance. Bankers Life affiliates also agreed to settlements: UVEST will pay $750,000 and Proequities will pay $435,000.
Additionally, along with its Illinois-registered brokerage subsidiary, BLC Financial Services Inc., Bankers Life must not engage in hiring, training or supervising any registered representative or investment advisers through March 31, 2015. Bankers Life cannot engage in brokerage activity and must hire an independent consultant to ensure compliance with the settlement.
"This settlement resulted from an examination prompted by a single complaint from an 82-year-old investor regarding the sale of an annuity product," Shaw said. "All investors, whether businesses or individuals, should never hesitate to contact the office with questions, concerns or complaints."
Randy Billings, Mainebiz senior writer, can be reached at email@example.com