Universal Life settles with New York for $2 mln
January 5, 2006
NEW YORK, Jan 5 (Reuters) - New York Attorney General Eliot Spitzer and the state's insurance regulator reached a $2 million settlement with Universal Life Resources, a closely held insurance and benefits consulting firm accused of fraud.
Under the agreement, Douglas Cox, the chief executive of San Diego-based ULR, and his affiliated companies will provide $2 million in restitution to policyholders across the United States harmed by the firm's actions. ULR also will adopt new business practices and fees to avoid conflicts of interest.
In November 2004, Spitzer and New York's insurance commission alleged ULR received undisclosed payments from some of the country's largest life insurance companies, including MetLife, Prudential, and UnumProvident, in return for steering business to them.
The complaint also alleged ULR imposed secret fees for "communications services" far above market rate.
Going forward, ULR agreed to charge a single fee or commission for its services, ending the practice of soliciting contingent commissions and communication fees. The firm also agreed that all forms compensation be approved by its clients.
ULR has also agreed to a monitor of its insurance related business practices for a period of five years.