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Insurance Company Accused of Duping Soldiers Will Pay Up
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ShareAugust 04, 2006 7:00 AM
A Texas life insurance company has agreed to a $70 million settlement of multi-state and federal charges its sales agents duped 55,000 soldiers into buying life insurance.
The Securities and Exchange Commission says agents for American Amicable Insurance Co. conned soldiers into believing they "could become millionaires" by investing in the company's "Horizon Life" accounts.
Because soldiers already get insurance from the federal government, federal and state officials say, American Amicable dressed up its policies as investments that would generate $1 million over 20 years.
Georgia State Insurance Commissioner John Oxendine told ABC News the scheme involved "con men" striking up relationships with soldiers by acting as if they wanted to support the war effort.
"It's war profiteering," Oxendine said. "It's people trying to use these soldiers just to make a quick buck."
As part of the settlement, American Amicable will be banned from military installations, which have become honey pots for financial predators.
Just a year ago, American Amicable was forced to refund $1.5 million to soldiers.
"This is not a case of a few rogue agents, but of a centralized, company-sponsored marketing system that pitched an investment and had the effect of deceiving thousands of American military personnel," SEC officer Helane Morrison said in a prepared statement.
American Amicable company has admitted no wrongdoing. But the company said today it terminated agents who violated military and company policy and that they implemented a new compliance system which includes surprise inspections of field agents.
For two years, Congress has been generating a lot of back-slapping press releases about protecting service members from financial predators. But they haven't sent a bill to the president.
The House and Senate have each passed bills, but it's up in the air as to when a final version of the bill will be passed into law.
Officials from American Amicable testified before Congress in September 2004 in support of expanding base access for insurers. Today the company said that less than 10 percent of its business is comprised of sales to the military.
"We are a strong company, and that is because of our employees, our agents and our products," said Lanny Peavy, president and CEO. "This settlement is in the best interest of our customers, employees and agents, and will allow us to focus on moving forward as we continue to provide service to our policyholders."
August 4, 2006 | Permalink | User Comments (10)
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This congress is all about back slapping and never actually getting anything done to protect the citizens of this country. Everyone sitting in office today should be voted out and we should try again with a whole new bunch.
Posted by: Anne Cosper | Aug 4, 2006 12:41:12 PM
I am glad that companies like these who prey on the military have to pay, they should be put out of business entirely, I thought fraud was illegal??
Someone needs to ask the veterans administration why there are still widows and their children whose husbands were killed in Iraq back in 2003-2004 who still have not received benefits????
Thanks
Posted by: Sue Filutze | Aug 4, 2006 12:47:00 PM
Insurance companies are the richest businesses in the world and they are nothing but non-productive parasites. We would be better off without them.
Posted by: Joe Krakowski | Aug 4, 2006 2:23:14 PM
What a shame, our boys are giving up their personal freedoms, their futures being put on hold,coupled with putting their lives on the line for miserable scum-bags like these greedy insurance companies, making the almighty dollar. I am sure there are other companies that are profitting from this war as well, only they have not been caught. God Bless America.
Posted by: Marie Sears | Aug 4, 2006 2:38:18 PM
in texas if you steal form large groups of people it's called bizness. the insurance business, the furneral business are reuglated by the business community and any state employee that suggests that something illegal is happening is immediately fired. rove had that lawyer fired the next day for answering questions like she was supposed to do. notice the complint is from georgia.........
Posted by: jim | Aug 4, 2006 6:03:05 PM
Insurance companies were doing the same thing in 1970 - convincing soldiers, including myself, to buy useless products before they were shipped off to Vietnam. That was 35 years ago. When do you think congress might actually get off the dime?
Posted by: Michael Chapman | Aug 5, 2006 11:07:39 PM
If all you peole out there believe that this "do-nothing" congress is going to do anything, you must still believe in the Easter Bunny and Santa Clause. This has to be one of the worst congress'that has ever been electer. The blame can be layed at the feet of both Frist and Hastert. They both need to get a life outside of Congress. Where are the "Statesmen" when you need them?
Posted by: Ed Salmon | Aug 6, 2006 1:32:19 AM
Jim number 1 learn how to spell number 2 just because that business was in Texas doesn't mean we are all like that. Not all business do that.
Posted by: heather | Aug 6, 2006 2:07:14 AM
Once again the big dog win and chalk up one in the L column for the little guy. Because 10,000,000 split 57,000 ways only equal to 175 dollars each with 60,000,000 remaining dollars (of settlement) at the discretion of the Company at fault. Again, allowed to mismanage more money. How about issuing caculators to those who make the final decision.
Posted by: cornell | Aug 7, 2006 12:31:37 PM
It is despicable that Congress has allowed Insurance companies to bleed us all dry but more than that how Congress votes themselves a fat raise while the rest of us keep sucking wind.
I think that any Congressman expecting to be re-elected must be made to ensure us that Congress will vote themselves a pay cut such that the rest of us have some justice.
No paycut....no election!
How do you like that!
Posted by: Larry B | Aug 8, 2006 12:04:39 PM
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