State alleged that USI Consulting Group (USICG), an annuity broker specializing in pension plans, accepted concealed compensation from insurers in exchange for access to lucrative pension plan business. According to the settlement, USICG received payments from the Hartford Insurance Company, Principal Financial Services Group and Mutual of Omaha. In exchange for these hidden payments to USICG, the insurers received competitive information and “last look” bidding opportunities not provided to carriers that declined to pay the secret compensation.
These secret agreements increased USICG’s overall compensation on those SPGA placements by as much as 33 to 50 percent — and effectively directed business to those carriers willing to pay the contingent compensation. The state alleged that USICG’s practices — including misrepresentations to plan sponsors and conspiring with carriers in a scheme to deceive its clients — violated Connecticut’s unfair trade practice laws.
USICG agreed to several business reforms, including that it will not accept or request any contingent compensation related to SPGAs. USICG has also agreed to fully and clearly disclose to clients — prior to acceptance — all quotes and indications sought and received by USICG in connection with an SPGA placement. The company will also disclose (and then obtain client consents in writing) all commissions/fees in either dollars or percentage amounts paid to USICG.
The company paid $470,000 to the state as disgorgement.