New York’s Department of Financial Services (DFS) has fined Athene Holding $45 million for conducting more than a dozen pension risk transfer transactions in the state without a license.
According to the regulator’s consent order, Athene entered into 14 large-scale pension risk transfer transactions involving thousands of New York policyholders, two of which involved New York-based plan sponsors covering tens of thousands of policyholders. In addition to the 14 pension risk transactions, the firm bid on, but did not win, approximately 60 additional pension risk transactions. The DFS said these bids collectively involved more than 1,000 communications that were sent by Athene representatives from within New York and/or sent to New York-based consultants of plan sponsors.
In contracting the transactions, the DFS said Athene engaged in thousands of unauthorized communications with New York-based plan sponsors. New York state law stipulates that unauthorized insurers engaging in such activities are subject to a penalty for each telephone call, piece of mail, email, or other communication originating from a New York office or from outside New York into New York.
“Protection of New Yorkers’ retirement plans is more important than ever in this vulnerable economy,” New York’s Superintendent of Financial Services Linda Lacewell said in a statement. “Unlicensed insurance activity puts retirement assets at risk and that’s why we won’t tolerate it.”
As part of its agreement with DFS, Athene will transfer the handling of transactions from Athene Annuity & Life Company to its New York-based subsidiary, Athene Annuity & Life Assurance Company of New York.
After learning that unauthorized life insurers and their representatives were operating in the pension risk transfer market, Lacewell issued a circular letter in September to all life insurers and insurance producers advising them of their obligations under New York insurance law and ordering them to correct any violations.
“We are taking this action to guard against unauthorized activity in the insurance market by or for companies that are not licensed in New York to ensure that New York’s pension holders receive the important consumer protections provided by New York insurance law,” Lacewell said in the circular.
DFS said it is actively investigating other potential violations in the pension risk transfer market and is also working with Athene and others insurers to bring the state industry into compliance with New York insurance law.