Mutual of Omaha has reached a settlement with the Connecticut Attorney General regarding the AG's ongoing investigation into compensation paid to brokers who sold single premium group annuity policies.
Single premium group annuity (SPGA) policies are purchased by pension plans to provide annuity benefits and account for less than 1% of policies sold by Mutual. The settlement with the Attorney General (AG) relates to compensation paid to a few brokers who sold Mutual’s SPGA policies between 1999 and 2004.
Under the settlement, Mutual will establish a $1.5 million fund to refund premiums to plan sponsors who purchased an SPGA policy from Mutual between 1999 and 2004, where Mutual reimbursed broker expenses under an expense reimbursement agreement or paid an override commission to the broker under an administrative services agreement. Mutual also agreed to pay a $195,000 penalty to the State of Connecticut.
John Fischer, vice president of Mutual’s retirement plans division, said: In every case, Mutual disclosed to its customers the overall cost of the annuities being purchased under the SPGA policy, which included the cost of the compensation paid to brokers. To our knowledge, we were the lowest bidder for every SPGA policy that we issued.