Big Insurance Companies Settle In Broker Kickback Case

MetLife, Prudential and Unum Insurance have settled with the San Diego DA’s office over their alleged payments in the hundreds of thousands to an insurance broker to send business their way. Universal Life Resources (ULR) was contracted to get the best insurance value for life, disability, and health insurance by large businesses for their employees. Instead, the suit claims, ULR got payments to funnel business to the insurers. The settlement calls for the insurers to pay a total of $1.1 million, which will fund more public enforcement of fair competition cases.

DA Announces $1.1 Million Settlement With Insurance Companies Accused of Secret Payments (PDF) [Press Release]

(Photo: Getty)

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  1. TechnoDestructo says:

    Why does no one go to prison for this?

  2. bohemian says:

    Isn’t this the exact same three companies that are currently in trouble with the fed for forcing long term disability claimants to file for social security disability before they would pay their claims?

    If an insurance company is habitually conducting criminal or barred activity they should be shut down.

  3. Sugarless says:

    @TechnoDestructo: I’d like to start seeing prison terms too. Enough with this wrist slapping.

  4. ChuckECheese says:

    A similar-yet-different dramas is going on here in El Paso: It is alleged that Bear Stearns paid off investment people in El Paso City government to buy mortgage-backed securities. The FBI is investigating, and El Paso has lost a lot of money.

  5. Ftp1423 says:

    Oh wow I just realized what was in the picture. For about 5 minutes I was staring at it thinking “What an incredibly creative and abstract work of art” because I thought it was a women in a grey dress falling into an abyss.

    But yea this is pretty F-ed up

  6. chrisjames says:

    The meat of the settlement is that the insurers now have to disclose all payments to independent insurance brokers, since this was a simple case of ULR not offering the service it was being paid to do. Google does the same thing, but it’s open about its referrals. I’m guessing they’ll disclose the payments, but still no one will question the brokers. Wheeeee, laws.

  7. JiminyChristmas says:

    According to the article, the penalty was paid jointly by MetLife, Prudential, and Unum. Let’s see, admit no wrongdoing, pay a $500K fine, and move on…why does it seem a penalty like that means precisely nothing to a company the size of, say, MetLife? I have to wonder if it even equals the amount of illegal profits they collected.

  8. bohemian says:

    They paid about $166 grand each as a penalty. That is chump change to these companies.

  9. GearheadGeek says:

    What does this have to do with mortgages again? Does “broker” (as in insurance broker) just make someone think of mortgages? The only mention of mortgages is in the title, none in the consumerist article nor are there any in the linked document.

  10. powerjhb says:

    @JiminyChristmas: Chumpchange still, but you had the wrong amounts.

    MetLife agreed to pay $500,000; Prudential agreed to $350,000; and Unum agreed to $250,000.

  11. ChuckECheese says:

    @GearheadGeek: The similarity isn’t with the type of industry, it has to do with the type of (fraud, kickbacks) transaction.

  12. GearheadGeek says:

    @ChuckECheese: Yes, but the title clearly (and it seems incorrectly) describes it as a mortgage broker kickback case, when it seems it’s in actuality an insurance broker kickback case. Perhaps just as sleazy, but not the same.

  13. ChuckECheese says:

    @GearheadGeek: You’re right about the title of the post. Yet, it’s somehow all the same.

  14. captainleah says:

    if you are not going to let me post please delete my account