An investigation by the New York State Department of Financial Services ("DFS") discovered that Banner Life solicited and did insurance business in New York without a license. Today's action continues an industry-wide investigation by the Department, which has collectively brought $63.5 million in penalties through four investigations for unlicensed insurance business in the PRT industry.
"Unlicensed insurance activity jeopardizes the hard-earned financial wellbeing of New Yorkers," said Superintendent Harris. "The Department remains committed to safeguarding the retirement assets of consumers and will continue to hold bad actors accountable who actively violate insurance licensing requirements and related New York laws and regulations."
A PRT transaction typically involves a plan sponsor, usually an employer offering pension plan protection to its employees, who transfers some or all of the assets and liabilities of a defined benefit pension plan to a life insurance company. The company then issues a group annuity contract ("GAC") obligating itself to make benefit payments to either the plan sponsor or the plan participants. Between 2016 and 2019, Banner Life was an active participant in the pension risk industry. During that time, certain client-facing employees solicited insurance while in New York, resulting in violations of New York's Insurance Law.
As part of its agreement with DFS, Banner Life will transfer the handling of transactions from Banner Life to its New York-based subsidiary, William Penn Life Insurance Company of New York.
In 2019, DFS issued a circular letter to all life insurers and insurance producers warning them of their obligations under the Insurance Law and putting them on notice to fix any violations after learning that unauthorized life insurers and their representatives were operating in the PRT market. DFS will continue to actively investigate violations in the PRT market and to that end is working with Banner Life and other insurance companies to bring the entire New York industry into compliance with New York law.
Read a copy of the consent order on the DFS website (https://www.dfs.ny.gov/industry_guidance/enforcement_actions_Insurance).
Original text here: https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202207281
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