Bankers Life paying $10M fine following securities probe

CNO Financial Group Inc. has agreed to pay $9.9 million to settle allegations by regulators in four states that its Bankers Life subsidiary acted as an investment adviser and broker-dealer without proper licensing.

The Carmel-based company said in a regulatory filing Thursday that it will take a $10 million first-quarter charge related to the settlement, which calls for CNO to make payments to the states of Maine, New Hampshire, Vermont and Missouri and also cover "certain costs of the investigation."

An audit revealed Bankers Life was operating in some states where it was not licensed by affiliating with licensed brokers and then steering customers into its annuity products, Maine's Office of Securities said in a statement to Reuters.

The statement said the total cost to CNO Financial Group, including reimbursements and fees, would be $10.6 million.

CNO also agreed to surrender the license for its broker-dealer subsidiary, BLC Financial Services Inc, to both the SEC and regulators in Illinois, where it is based.

Financial advisers working for independent broker dealers will continue to sell Bankers Life products in the settlement states.

CNO Financial noted in its filing that state securities regulators acknowledged the conduct of Bankers and the now-eliminated BLC Financial Services resulted in "no known direct consumer harm."

"Bankers Life believes that this settlement provides additional clarity between the roles of agents and financial advisers and allows the company to continue to focus on providing the products and services its customers need," the company said.

Bankers Life has faced numerous complaints about the way it conducts business in recent years. 

Please enable JavaScript to view this content.

Editor's note: IBJ is now using a new comment system. Your Disqus account will no longer work on the IBJ site. Instead, you can leave a comment on stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Past comments are not currently showing up on stories, but they will be added in the coming weeks. Please note our updated comment policy that will govern how comments are moderated.

{{ articles_remaining }}
Free {{ article_text }} Remaining
{{ articles_remaining }}
Free {{ article_text }} Remaining Article limit resets in {{ count_down }} days.