Georgia-based Econ-O-Check Corporation has been ordered to cease and desist from marketing unapproved insurance policies to Minnesota residents following an order from Minnesota Commerce Commissioner Jim Bernstein. The company also received a $15,000 fine.
A licensed Minnesota insurance agency, Econ-O-Check sold death insurance policies for American Bankers Insurance Company (ABIC) of Miami, Fla., to participants of Minnesota financial institutions. Bernstein’s order alleged that the policy contracts and rates had not been filed for review and approval by the Department as required by law. Also, Econ-O-Check allegedly sold the policies without being properly positioned as an agent of ABIC.
The cease and desist order given to Econ-O-Check is the result of an on-going investigation into the actions of a number of large credit insurance companies doing business in the state. Credit insurance is offered and sold by financial institutions, retailers, auto dealer, and other lenders.
Only three years ago, The Minnesota Department of Commerce levied a $688,776 fine against ABIC, the largest penalty in department history, resulting from a department examination of the company’s business practices, which noted violations of state law. The violations included improper agent licensure, not following claims procedures, and violating policy contract and rate filing requirements.
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