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MARYLAND INSURANCE ADMINISTRATION

JUNE 24, 2004

transaction in which new life insurance is purchased and it is known that existing life insurance will be reduced in value.

The Company publishes and distributes to its’ management staff a brochure entitled ‘Managing Director’s Guide for Compliance’. The purpose of this brochure is to focus on good management principles and to ensure ethical business practices are maintained within the Company. It provides for a series of documented procedures to prevent an ad hoc approach to management.

The examiners are concerned that customer complaints are not raising the flags or level of attention within the Company to bring about a decrease in the complaints regarding misrepresentation and replacement.

This conclusion is based on complaints against specific agents and district offices that have been repetitive. The single exception is Company action taken against one retired agent on a 050 contract that was eventually terminated due to excessive complaints.

The procedure established for resolving complaint issues allow the District Manager, who is responsible to investigate customer complaints, to provide answers to the Regional Vice president that are inclusive, and self protective.

The examiners contacted several complainants and determined that the District Manager had been with the agent at the time of sale. This was not included in the complaint report. In other instances the District Manager along with a Home Office representative was included in the presentation (and identified by name) and this was not included in the report to the Vice President.

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MET LIFE REPORT NO. 786-01

PAGE 32

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