Minnesota will get a $700,000 boost to its general fund as part of a $1.6 million settlement with insurance giant AFLAC over improper conduct by its sales agents, the Commerce Department said Wednesday.
The company admitted no wrongdoing.
While the exact nature of the conduct was kept confidential, investigators from Minnesota, Missouri and Idaho reviewed sales and marketing tactics, underwriting and claims practices that included selling duplicate accident and health coverage, selling policies that were not suited for a person or group, overselling certain policies or selling policies with waiting periods.
"Our goal is to make sure that consumers are protected," Commerce Commissioner Mike Rothman said. "We want to make sure agents and the company work with us to make sure that policyholders get the benefit of buying insurance products that work for their needs."
AFLAC, whose formal name is American Family Life Assurance Co., provides supplemental insurance to individuals and businesses to help pay benefits not covered by traditional medical insurance.
The Fortune 500 company, based in Columbus, Ga., earned $22.2 billion in revenue in 2011 from sales in the United States and Japan.
In addition to the penalty, Rothman said AFLAC will have to "bring in a new governance model and structure ... so this activity stops and doesn't happen in the future."
Rothman said the department will keep monitoring AFLAC to ensure the new compliance programs have adequate consumer protections.
As part of the settlement agreement, Missouri will get $700,000 and Idaho $200,000.
Jackie Crosby • 612-673-7335