MARADMINS : 514/06
R 260001Z OCT 06
FM CMC WASHINGTON DC(UC)
TO AL MARADMIN(UC)
UNCLASSIFIED//
MARADMIN 514/06
MSGID/GENADMIN/CMC WASHINGTON DC JA//
SUBJ/INSURANCE SALES PRACTICES AND SETTLEMENT AGREEMENT AFFECTING
/MARINES AND FAMILY MEMBERS.//
REF/A/MSGID:DOC/-/08JUN2007//
REF/B/MSGID:DOC/-/30MAR2006//
NARR/REF A IS MULTI-STATE REGULATORY SETTLEMENT AGREEMENT IN THE
MATTER OF AMERICAN-AMICABLE LIFE INSURANCE COMPANY OF TEXAS, PIONEER
AMERICAN INSURANCE COMPANY, AND PIONEER SECURITY LIFE INSURANCE
COMPANY. REF B IS DOD INSTRUCTION 1344.04, PERSONAL COMMERCIAL
SOLICITATION ON DOD INSTALLATIONS.//
POC/C. B. RYDELEK/JAL/-/-/TEL:COM (703) 614- 1266/TEL:DSN 224-1266
/EMAIL:CHRISTOPHER.RYDELEK@USMC.MIL//
GENTEXT/REMARKS/1. PURPOSE. THIS MSG INFORMS COMMANDERS AND MARINES
OF A SETTLEMENT AGREEMENT, REF (A), CONCERNING ALLEGATIONS OF
MISLEADING BUSINESS PRACTICES IN AMERICAN-AMICABLE COMPANIES'
MARKETING AND SALE OF LIFE INSURANCE TO SERVICEMEMBERS AND THEIR
FAMILY MEMBERS.
2. BACKGROUND. IN JUNE 2006, STATE REGULATORS AND FEDERAL AGENCIES
SETTLED LEGAL CLAIMS BROUGHT AGAINST AMERICAN-AMICABLE LIFE
INSURANCE COMPANY OF TEXAS AND ITS AFFILIATES PIONEER AMERICAN
INSURANCE COMPANY AND PIONEER SECURITY LIFE INSURANCE COMPANY
(AMERICAN-AMICABLE COMPANIES) FOR ALLEGED VIOLATIONS OF INSURANCE OR
CONSUMER PROTECTION LAWS IN THE COURSE OF THEIR MARKETING AND
SELLING A LIFE INSURANCE POLICY, COMMONLY CALLED "HORIZON LIFE" OR
"WEALTH BUILDER," WHICH WAS A TERM LIFE CONTRACT WITH AN ANNUITY
ACCUMULTAION FUND RIDER. CONSUMERS WHO PURCHASED SUCH POLICY,
INCLUDING APPROXIMATELY 70,000 SERVICEMEMBERS, ARE ELIGIBLE TO
RECEIVE CASH REFUNDS AND INCREASED POLICY BENEFITS TOTALING $70
MILLION. UNDER THE AGREEMENT, THE COMPANIES WILL PAY $10 MILLION TO
APPROXIMATELY 57,000 SERVICEMEMBERS AND THEIR SPOUSES AND DEPENDENTS
WHO PURCHASED A HORIZON LIFE OR WEALTH BUILDER POLICY FROM 1 JANUARY
2000 THROUGH 28 JULY 2006, WHETHER OR NOT THEY ARE CURRENT
POLICYHOLDERS. THE COMPANIES ALSO WILL INCREASE THE CASH SURRENDER
VALUE OF ALL IN FORCE POLICIES WHICH INCLUDE A 20TH-YEAR
ACCUMULATION VALUE ADDITIONS ENDORSEMENT, AND WILL CANCEL THE
AUTOMATIC PREMIUM PAYMENTS PROVISION OF SUCH POLICIES. IN ADDITION,
THE AGREEMENT FORBIDS THE COMPANIES AND THEIR AGENTS FROM SOLICITING
OR SELLING ANY PRODUCT ON ANY MILITARY INSTALLATION FOR FIVE YEARS,
OR PARTICIPATING IN OR ASSISTING WITH ANY PERSONAL FINANCE CLASS FOR
SERVICEMEMBERS ON A MILITARY INSTALLATION. MORE INFORMATION ON THE
SETTLEMENT IS AT
HTTP:/WWW.USDOJ.GOV/USAO/PAE/NEWS/PR/2006/AUG/AMERICANAMICABLEPRESS.P
DF.
3. ACTION. MARINES AND THEIR DEPENDENTS WHO PURCHASED A LIFE
INSURANCE PRODUCT FROM AN AMERICAN-AMICABLE COMPANY SHOULD CALL THE
COMPANIES' CONSUMER SERVICE CENTER AT 1-800-736-7311, AND GIVE THEIR
CURRENT MAILING ADDRESS. THE COMPANY WILL CONTACT EACH
POLICYHOLDERS BY MAIL INFORMING THEM OF THEIR POLICY'S INCREASED
CASH SURRENDER VALUE AND DELIVER A CHECK PAYABLE TO CERTAIN CURRENT
AND FORMER HORIZON LIFE OR WEALTH BUILDER POLICYHOLDERS. COMMANDERS
ENSURE THAT AMEIRICAN-AMICABLE COMPANIES AND THEIR AGENTS STOP
SOLICITING OR SELLING ANY COMPANY PRODUCT ON THEIR MILITARY
INSTALATION FOR FIVE YEARS. IN ADDITION, COMMANDERS ENSURE ALL
INSURANCE COMPANIES AND THEIR AGENTS COMPLY WITH REF (B) BEFORE
CERTIFYING ANY MILITARY PAY ALLOTMENT.
4. YOUR LOCAL MARINE CORPS LEGAL ASSISTANCE OFFICE HAS MORE
INFORMATION REGARDING THE TERMS OF THE SETTLEMENT AGREEMENT.//