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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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.
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.
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
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.
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.
They paid about $166 grand each as a penalty. That is chump change to these companies.
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.
@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.
@GearheadGeek: The similarity isn't with the type of industry, it has to do with the type of (fraud, kickbacks) transaction.
@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.
if you are not going to let me post please delete my account
Why does no one go to prison for this?