Iowa Gov. Chet Culver and lawmakers are questioning why the Iowa Insurance Division fined an insurance company $750,000, but didn’t make public the reasons for the penalty.
Culver is concerned the agreement with Conseco Life Insurance Co. of Carmel, Ind., does not disclose necessary information for consumers, Culver spokesman Brad Anderson said.
“The lack of public information in this case is unacceptable to the governor,” Anderson said. “The governor is looking into this matter and wants to take steps to ensure that future settlements abide by his guiding principles of open government and consumer protection.”
Rep. Dave Jacoby, D-Coralville, said he wants to know how and why confidentiality agreements are reached.
“Why aren’t we seeing exactly what the wrongdoing was?” he asked.
Concerning an agreement signed March 21, the insurance division will say only that it investigated allegations that Conseco violated state laws or insurance regulations. Conseco denied guilt but paid the fine — one of the division’s largest fines against an insurer.
The investigation was related to expenses in life insurance policies, the division said.
Agency spokesman Tom Alger said Wednesday that because the division agreed not to proceed with further action against Conseco, details of its inquiry have been kept confidential by law. The division will not issue a final report, which would be a public record.
“There is no secrecy issue here,” Alger said.
State Insurance Commissioner Susan Voss, who signed off on the agreement, was traveling Wednesday, state officials said.
She issued a statement saying the agreement with Conseco allowed the state to collect the penalty and allowed policyholders to benefit from a class-action lawsuit against the company.
“Our No. 1 concern is consumer protection,” Voss said.
The division had investigated Conseco’s use of an obscure pricing mechanism, called an R-Factor, in some of its life insurance policies.
Policyholders have sued Conseco in federal court in California over the R-Factor, which had the effect of lowering the costs of insurance policies but then worked to the disadvantage of owners once it was removed.
Conseco has agreed to settle the California class-action lawsuit, meaning that policyholders nationwide could collect as much as $400 million in cash or credits. Lawyers estimated that about 1,000 Iowa policyholders could receive a portion of the settlement.
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Information from: The Des Moines Register,
http://www.desmoinesregister.com
Topics Iowa
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