The U.S. Securities and Exchange Commission is probing sales and disclosure practices at Valic, a unit of U.S. insurer American International Group Inc, the Wall Street Journal reported on Tuesday, citing sources familiar with the matter.
The inquiry centers on whether incentives in Valic’s compensation structure rewarded representatives for selling higher-cost products to retirement plan participants and whether Valic properly discloses the payments its representatives receive on certain product sales, the report said. (https://on.wsj.com/2JyG1WN)
Valic provides retirement products to employees in K-12 schools, colleges, and not-for-profit organizations.
The SEC is also looking at Valic’s arrangements with school districts, in which it provides money to cover certain school expenses while also offering investment advice and products to school employees, the report said.
“We cannot comment at this time on any regulatory inquiries or related personnel matters,” an AIG spokesman told Reuters.
Several high-level Valic executives have been placed on administrative leave in recent weeks, the report said.
(Reporting by Bharath Manjesh in Bengaluru; Editing by Maju Samuel)
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