MN Nets $700K from AFLAC Settlement After Investigation
The state of Minnesota will receive $700,000 from a recent settlement agreement reached with American Family Life Assurance Company of Columbus (AFLAC).
The settlement stems from a multi-state investigation: The Minnesota Department of Commerce joined state departments from Idaho and Missouri in an examination of AFLAC’s underwriting, sales and marketing, producer licensing, complaint handling, and claims practices.
The Commerce Department said Wednesday that Commissioner Mike Rothman signed a settlement agreement with AFLAC, through which the company agreed to pay $1.6 million total, of which Minnesota will receive $700,000.
The settlement stems from a 2009 “market conduct examination” of AFLAC’s practices. The three states investigated whether the company sold duplicate accident and health coverage, oversold coverage, sold policies containing waiting periods, or improperly supervised advertising that was disseminated by producers, among other concerns.
AFLAC neither admitted to nor denied any wrongdoing, according to the settlement. The company agreed, however, to develop a “corrective action plan” to ensure regulatory compliance as it pertains to claims handling, sales and marketing procedures, and agent supervision and compensation practices. The company will also submit semi-annual reports to the three states involved in the investigation, in which it will outline its progress in implementing the corrective action plan, according to settlement documents.
“We strive to protect consumers from improper market conduct by insurance companies and agents,” Rothman said in a statement. “We are pleased with the outcome of this multi-state examination and AFLAC’s cooperation.”
Columbus, Georgia-based AFLAC sells supplemental insurance to offer benefits not covered by traditional medical insurance. According to its website, AFLAC has more than 70,000 licensed agents, insures more than 50 million people, and had assets of roughly $117 billion and revenue of $22.2 billion in 2011.