Bankers Life and Casualty Company v. Superintendent of Insurance
2013 ME 7
| Me. | 2013Background
- Bankers Life appealed a judgment affirming a decision by the Superintendent of Insurance ordering restitution and a $100,000 civil penalty for deceptive sales practices by its agent.
- The agent sold three Bankers Life annuities to an elderly, cancer-survivor client, funded by liquidating CDs and selling GE stock and rolling over an IRA annuity.
- The sales exhibited irregularities: incomplete fact-finder data, no signature updates, and no independent supervisory review despite a 2005 Consent Agreement with the Bureau.
- The suitability analysis showed concerns: a lower guaranteed rate on the new annuity, tighter withdrawal limits, and a ten-year maturation longer than the client's life expectancy.
- There were improper comparisons and lack of documentation: the agent failed to provide math used for recommendations and did not ensure professional tax or financial advice.
- The client’s funds were constrained post-sale, causing distress and reduced ability to meet expenses; the agent’s organizational understanding and supervision were deficient.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether insurer liability extends to the actions of its agents | Bankers Life seeks liability under 24-A M.R.S. § 1445(1)(C)-(D) for its agents' misconduct. | Bankers Life contends no independent action required; liability arises only if insurer acted improperly. | Insurer liable for agents' actions under § 1445(1) |
| Whether the Superintendent's supervisory findings support liability | Bankers Life failed to maintain adequate supervision and compliant suitability processes. | Bankers Life disputes sufficiency of supervisory findings. | Findings supported liability and sanctions |
| Whether the penalties and restitution were warranted | Restitution and civil penalty were appropriate to address harm and regulatory violations. | Bankers Life challenges the amount and basis for penalties. | Restitution and $100,000 penalty affirmed |
| Interpretation of applicable statutes/regulations | Statutes create accountability for insurer actions via agents and supervisory duties. | Arguments against expansive insurer liability or supervisory requirements. | Statutes interpreted consistently with recorded intent; insurer liable |
Key Cases Cited
- Anthem Health Plans of Me., Inc. v. Superintendent of Ins., 2012 ME 21 (Me. 2012) (review standard for Superintendent determinations)
- Me. Health Care Ass’n Workers’ Comp. Fund v. Superintendent of Ins., 2009 ME 5 (Me. 2009) (statutory interpretation and deference to agency expertise)
- Consumers for Affordable Health Care, Inc. v. Superintendent of Ins., 2002 ME 158 (Me. 2002) (review of agency findings based on substantial evidence)
- Rangeley Crossroads Coalition v. Land Use Regulation Comm’n, 2008 ME 115 (Me. 2008) (substantial evidence standard and review of agency findings)
- Martha A. Powers Trust v. Bd. of Envtl. Prot., 2011 ME 40 (Me. 2011) (deference to agency findings when supported by evidence)
- Gulick v. Bd. of Envtl. Prot., 452 A.2d 1202 (Me. 1982) (principles of administrative review and evidence)