The head of the Iowa Insurance Division will meet with legislators to explain why the agency is keeping secret the details of a $750,000 civil penalty against an Indiana insurance company.
Insurance Commissioner Susan Voss will discuss the matter with a joint committee of House and Senate lawmakers at 1 p.m. on April 10.
Gov. Chet Culver and members of the Senate and House commerce committees have expressed concerns over the insurance division’s confidential agreement with Conseco Life Insurance Co.
Culver’s spokesman, Brad Anderson, said the governor’s chief of staff, Patrick Dillon, met with Voss and asked her to prepare a report on what records can be shared with the public.
“Like everyone, we need more information,” Anderson said.
The division contends there’s nothing wrong with fining Conseco but not making a final report on its investigation. A final report would be open for public review, but the division expressly agreed with Conseco on March 21 to halt its inquiry before it reached that stage.
The division did make public a six-page “memorandum of understanding” that said it had investigated allegations that Conseco had violated state law. It said that Conseco denied any violations, but the company agreed to pay one of the largest fines the division has assessed against an insurer.
The agreement said both sides “wish to resolve all matters regarding Conseco Life’s use of an R-Factor in Lifestyle and Lifetime insurance policies.”
Conseco has tentatively agreed to pay as much as $400 million to settle a class-action lawsuit filed in California over the R-Factor. An attorney for plaintiffs said perhaps 1,000 Iowans could be affected.
Insurance experts described the R-Factor as a secret pricing mechanism that depressed expenses inside certain insurance policies. Once the R-Factor was eliminated, those expenses shot up.
Voss said in a statement on April 4 that the division was pleased that it was able to collect $750,000 for the benefit of Iowans without impeding policyholders’ rights to sue the company.
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