Athene Holding Ltd. has announced that Athene Life Insurance Company of New York (ALICNY) and First Allmerica Financial Life Insurance Company (FAFLIC), a subsidiary of Global Atlantic Financial Group, have agreed to a $55 million consent order with the New York State Department of Financial Services (NYSDFS).
The agreement resolves the regulator’s examination of ALICNY and a group of life policies that were reinsured to and administered by FAFLIC and its sub-contractor, DXC Technology.
The consent order includes a remediation plan with a value of up to $40 million to resolve issues experienced by affected policyholders, and a $15 million civil penalty.
Under the terms of the agreements between FAFLIC and Athene, FAFLIC bears sole financial responsibility for the settlement, and is subject to legally binding administrative service requirements.
The NYSDFS’s consent order relates to a block of life policies that Athene reinsured to FAFLIC and its affiliates during Athene’s acquisition of Aviva USA in 2013.
The regulator identified a series of administration issues that resulted from FAFLIC and DXC’s conversion of these life policies from legacy Aviva systems to DXC’s system.
Athene recently responded to a notice from the California Department of Insurance (CDI), which proposed fines and the temporary closure of its subsidiary, Athene Annuity and Life Company, for failing to meet standards in regard to the same block of reinsured life policies.
Athene said that the activity in the NYSDFS’s consent order does not involve its new business, which is issued and administered by a separate New York entity, administration system and procedures.
It added that it would continue to work with FAFLIC as the remediation matters are implemented.