Bankers Life and Casualty Co. of Chicago and its securities affiliate have been fined by the Texas Securities Board for operating as unregistered securities dealers and investment advisors in the state.
The two companies Bankers worked with in securities transactions, ProEquities Inc., based in Birmingham, Ala., and UVEST Financial Services Group, Inc. of Charlotte, N.C., were also fined.
Bankers Life is a subsidiary of CNO Financial, based in Carmel, Ind.
Bankers and its wholly owned subsidiary, BLC Financial Services Inc., will pay a $537,897 fine, according to legal documents filed in the state Sept. 5.
ProEquities was fined $8,207 and UVEST was fined $14,150.
Besides the fine, the Bankers entities will also have to hire an independent consultant to ensure compliance with the consent order.
Barbara Ciesemier, a spokesman for Bankers Life, said the fine reflects Texas’ participation in a settlement agreement between the North American Securities Administrators Association and BLC Financial Services, Inc. that was announced on April 4.
She said the penalty was pre-determined as part of the earlier settlement and “puts another legacy issue behind us.”
She said that, “We are satisfied with the Texas State Securities regulator’s participation in the agreement.”
Ciesemier said BLCFS was established in 2002 and appropriately registered in Illinois under a structure now deemed inappropriate by the regulators, and as a result, BLCFS will be eliminated.
She said Bankers branches will continue to be able to serve the needs of the Texas marketplace through ProEquities registered advisors, the current provider, who are co-located in Bankers’ branches.
“The steps taken in this settlement should ensure additional clarity between the roles of agents and financial advisors,” she said. “We are pleased to have this issue settled, as we continue working to provide the products and services our customers need.”
According to the consent decree, Bankers Life insurance agents began selling securities and annuities in Texas beginning in 2005 according to a deal the company made with UVEST.
The decree also stated that UVEST was registered in Texas and as a federal investment advisor, but not Bankers Life.
ProEquities assisted Bankers Life in getting its agents licensed and registered, according to the consent document.
According to the consent decree, Bankers Life received approximately $21 million nationwide from 2005 to 2011 from UVEST and ProEquities for variable annuity and securities transactions and investment advice.
The decree said dual insurance and investment securities agents received approximately $15 million of this amount nationwide, with Bankers Life keeping approximately $6 million.