A.G. targets ‘hidden payments’ and wins

Mutual of Omaha Insurance Co. agreed to pay $1.7 million to resolve allegations it concealed payments to brokers in exchange for “last look” bidding opportunities for annuity business from pension plans.

Having reached similar settlements with The Hartford Financial Services Group Inc. and Iowa-based Principal Financial Services Inc., Attorney General Richard Blumenthal said his office would now turn its investigative attention to broker companies themselves.

“These hidden payments were disguised as ”˜expense reimbursements”™ and ”˜administrative costs,”™” Blumenthal said, in a written statement. “In reality, these hidden payments to brokers were loaded into premium costs for private and public pension plans nationwide, and skewed the market to favor only the select carriers who provided these illegal payments.”

In 2007, Nebraska-based Mutual of Omaha had a $217 million profit on $4.2 billion in revenue.