Commissioner John Garamendi on Thursday announced a major lawsuit against Universal Life Resources of San Diego and four major insurers accused of hiding millions of dollars in secret commissions. During a news conference to announce the action, the Commissioner also disclosed that a settlement had been reached with ULR requiring it to end these practices immediately.
Commissioner Garamendi began investigating this problem in February. The suit, filed in California Superior Court in San Diego, names MetLife Inc., Cigna Corporation, Prudential Financial Inc., and UnumProvident Corporation as defendants. They are accused of collaborating with ULR to carry out the schemes that caused financial harm to California consumers.
“Employers and consumers put their trust in brokers to help them find the best insurance at the best price,” said Commissioner Garamendi. “But that trust has been broken. This lawsuit is one of many steps I will take to ensure that insurance consumers don’t suffer because of backroom kick-back deals.”
The complaint charges the defendants with violating state law by withholding from clients information about the secret deals struck with ULR. According to the complaint, ULR would steer clients to the four insurers in order to satisfy the secret financial arrangements, regardless of whether the insurance products were the best available.
On Wednesday the Commissioner reached the settlement with ULR which immediately and permanently bans the firm from engaging in these practices and requires the firm’s cooperation in the ongoing investigation.
“These brokers and insurers are lining their pockets at the expense of consumers,” said Commissioner Garamendi. “This is a scandal that has disillusioned consumers from coast to coast. Confidence must now be restored.”
The lawsuit and a copy of the settlement agreement will be posted on the Department Web site at www.insurance.ca.gov.
Bryan Shrier, CWCI Commisioner says: 
Scott says: 
Debbie Kegley says: 
Banks Still Face Legal Claims After $25 Billion Settlement
MF Global Judge to Examine Insurance Payments for Former Executives
Daredevil CEOs May Put Companies at Risk
California Independent Contractor Law May Be Liability for Agents, Brokers
North Carolina Continues Auto Regulation Debate As Rates Stay Same for 2012
Long-time California Lobbyist Looks to 2012 Legislation Affecting Insurance
Mine Safety Chief Seeks to End Complacency Over Safety
Virginia Court Grants Rehearing of Global Warming Claims Case
