Home Banking & Finance New York fines Rockland insurance company $45M for unlicensed work

New York fines Rockland insurance company $45M for unlicensed work

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Athene Holding Ltd., a Bermuda insurance company with offices in Pearl River, has agreed to pay a $45 million fine for doing business without a license.

The New York State Department of Financial Services filed a consent order April 13 with Athene Holding and Athene Annuity and Life Co. of Iowa.

Athene insurance fineThe Pearl River affiliate is licensed in New York, but Athene used unlicensed entities to sell complex pension contracts worth billions of dollars that covered New Yorkers.

The pension risk transfer contracts are typically negotiated with large businesses and institutions, whereby businesses offload retirement plan risks by buying insurance annuities.

Athene negotiated 14 such contracts from 2017 to 2019 that covered nearly 6,400 New Yorkers.

In 2018, for instance, Athene struck a $3.8 billion deal with Bristol-Myers Squibb, according to a press release issued by the company. The New York City-based pharmaceutical company would continue to pay lump sums to members of its U.S. retirement income plan who wanted one-time payments. Athene assumed the pension obligations for the remaining beneficiaries.

The plan included 1,400 retirees, 4,800 active employees and 18,000 employees who had not yet initiated their benefits, according to Bristol-Myers.

The problem, according to the consent order, was that Athene negotiated the 14 pension risk transfer contracts through unlicensed offices.

The state requires insurance companies that solicit, negotiate, sell or service annuities to New Yorkers to be licensed in New York. The rules include all communications, by telephone and email and web portal, sent or received in New York.

Athene, according to the consent order, opened an unlicensed office in New York City in 2018 and used thousands of emails and telephone calls to communicate with New York individuals and businesses.

Athene cooperated with the state investigation, according to the consent order.

The insurer agreed that the negotiated annuity contracts and all future New York annuity business will be handled by it’s licensed, Pearl River affiliate, Athene Annuity & Life Assurance Company of New York.

The Pearl River affiliate must maintain total capital of at least three times its risk-based capital. Athene must file annual compliance audits for six years, and it may not apply for tax deductions or credits on the $45 million penalty, on any federal, state or local taxes.

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