Spitzer files suit against U.S. benefits insurer

New York Attorney General Eliot Spitzer, in his continuing probe of broker commissions, has filed a civil suit against San Diego-based benefits broker Universal Life Resources Inc. and its CEO Douglas Cox.
The suit alleges the firm, which specializes in life and disability insurance, “steered business to insurers in exchange for lucrative payoffs and that this practice raised premiums for individual employees”. Life insurers mentioned in the suit include MetLife, Prudential and UnumProvident. Along with the allegations of steering clients, the suit also charges Universal Life charged undisclosed “communication services” fees far above the market rate these fees accounted for two-thirds of the firm’s revenue last year, the Attorney General alleges. “The complaint further alleges that ULR hides these agreements from its clients by falsely representing its compensation, omitting its fees from mandatory government filings, and refusing to deal with insurers who will not go along with its concealed arrangements,” a Spitzer press release says.
Spitzer alleges Universal Life engaged in improper practices in handling the benefits programs at large companies including Viacom and Marriott International.
At the same time, Universal Life and its CEO are facing citations from the state’s Insurance Department for violating the insurance code. The citations allege the use of “fraudulent, coercive and/or dishonest practices”.