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25 Feb 2011, 12.59PM
This case surfaced recently and not reported .
"The insurance agent convinced a woman  to invest $50,000 and instead of putting it into
a single premium policy, the agent changed the application, without her
knowledge, to an annual premium policy. After a lengthy investigation,
which was quite stressful to the consumer, the insurance company finally
agreed to refund the full payment of $50,000."
The case raises a lot of regulatory questions.
Why the case escaped the detection of the agent's supervisor, the manager above him and the compliance department is a great mystery. The truth is this case is representative of the rampant unethical practices and misconduct in the insurance industry because of commission. The agents get very creative , often without the customers knowing, to generate commission.
The above is certainly a case regulatory breach. Surprisingly the top down responsibility has no effect on the CEO.


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