Ethnics in Business

Ethnics in Business

  • Submitted By: jbuffins1
  • Date Submitted: 01/12/2009 8:24 AM
  • Category: Business
  • Words: 783
  • Page: 4
  • Views: 357

Javonah Buffins

Ethics in Business

Assignment 1.1

May 15, 2008

Most major companies have been sued for deceptive sales practices. American Investors Life Insurance Company was one of these major companies that agreed to change the way they do business and make Minnesota consumers completely using a unique restitution plan. The Minnesota Department of Commerce fined American Investors Life Insurance Company and two of its subsidiaries $1.4 million for using deceptive sales practices and selling annuities that were not suitable for Minnesota consumers. In addition to paying the third largest insurance fine in state history, the company also agreed to a robust restitution plan including a unique independent review process for handling complaints that could result in millions of dollars more in direct restitution for Minnesota consumers. The Department charged American Investors Life Insurance of Topeka, Kansas and their subsidiaries AmerUs Life Insurance and Senior Benefits Services with fifteen types of violations of Minnesota insurance law including:
• Selling insurance products and annuities that were not suitable for the consumer. In some cases, annuities were sold to senior citizens with maturity dates that effectively tied up their life savings, making the savings unavailable for basic living expenses.
• Selling insurance products that were not approved in Minnesota. After failing to gain approval for certain products through the Department's review process, some producers submitted false applications to the company showing the application signed in a different state. In one case, an agent for the company actually transported a consumer to Wisconsin so the policy could be signed in that state.
• Engaging in deceptive sales practices by scheduling meetings with consumers without disclosing the true purpose of the meetings. Some producers also held themselves out as financial planners, allowing consumers to believe they were working...

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