Ohio Military Personnel to Benefit from $70 Million National Settlement

The Ohio Department of Insurance recently announced that the Department has joined a $70 million multi-state and federal settlement with Texas-domiciled American-Amicable Life Insurance Company and its affiliates regarding the alleged improper sale of insurance and investment products to United States military personnel and civilians. Approximately 1,219 Ohioans will receive cash refunds and modifications to their existing active policies or will receive increased cash surrender benefits, according to the Ohio Insurance Department release.

“These insurance companies allegedly conducted practices that misled many young military recruits into buying an investment product when in fact they purchased an expensive term life product,” Insurance Director Ann Womer Benjamin said. “These acts will not be tolerated and the Ohio Department of Insurance will ensure that all Ohio policyholders are made whole under the terms of the settlement agreement.”

The settlement, which affects approximately 70,000 military personnel and a total of 92,000 policyholders nationwide, alleges that the American-Amicable companies violated insurance and consumer protection statutes in the sale and marketing of certain life insurance products. The affected companies include American-Amicable Life Insurance Company of Texas, Pioneer American Insurance Company, and Pioneer Security Life Insurance Company.

Under the settlement, the companies are required to make cash payments to former and current service members who were issued a “Horizon Life” policy from January 1, 2000 through July 28, 2006. The companies are to also increase the cash surrender value for all in-force “Horizon Life” and “Wealth Builder” policies regardless of when the policy was issued or military status. The insurance companies are to mail notices and remediation checks no later than October 28, 2006.

In addition, the companies are banned from selling the “Horizon Life” product, formally called “Wealth Builder,” after December 1, 2006 and at military bases for five years. They are also not permitted to use military personnel membership listings for sales or solicitation purposes. In settling the matter, the companies deny violating any state insurance or consumer protection laws.

Ohio military personnel who reside or are currently stationed in the state and civilians with questions about their policies or the settlement should call the Department’s consumer hotline at 1-800-686-1526. American-Amicable Life Insurance Company has established a hotline at 1-800-736-7311 to answer policyholder questions.

Source: Ohio Department of Insurance

Topics Carriers Ohio