Globe Life reports web portal breach as troubling year continues

Globe Life Insurance Co. self-reported a potential web portal breach Friday, the latest in a series of troubling incidents for the company.

In a Form 8-K filing, Globe Life said it was contacted Thursday by a state insurance regulator about the potential breach.

The insurer "initiated a review of potential vulnerabilities related to access permissions and user identity management for a Company web portal that likely resulted in unauthorized access to certain consumer and policyholder information," the filing said.

Upon being notified about the potential issue, Globe Life said it suspended access to the portal.

"The company believes the issue is specific to this portal, and all other systems remain operational," the filing said. "The company’s operations will not be significantly impacted by the removal of external web access to the portal in question."

The full impact of the portal breach isn't yet known, the insurer added.

It has been a difficult 2024 for Globe Life. At least three short-seller and other research firms have issued reports accusing brokers at subsidiary American Income Life of widespread insurance fraud, including writing policies for dead and fictitious people, and an alleged kickback scheme that netted millions for senior executives.

In its report Fuzzy Panda claimed it "reviewed hundreds of pages of court documents and interviewed dozens of former executives and agents. We uncovered a whistleblower from the executive ranks who showed us where the fraud was hidden. We even went undercover to go through the recruiting process more than 10 times."

Fuzzy Panda alleged that third-party policy sellers known to have committed insurance fraud contributed over 60% of the new business at Globe Life's American Income Life unit. AIL accounted for nearly half of the total underwriting margins last year.

The report claimed that Globe Life and AIL executives were involved in a bribery and kickback scheme that a lawsuit estimates netted them more than $65 million. Fuzzy Panda said it has spoken with a former executive who sent more than 200 emails detailing fraud to senior executives. The research firm claims to "have documents to prove it."

Fuzzy Panda said its researchers went undercover and detailed an alleged multi-level marketing scheme that "borders on an illegal Pyramid Scheme in Multiple States." Alleged drug use and sexual harassment were rampant, Fuzzy Panda claimed, and prospective agents encouraged to lie on licensing exams.

Responding during a first-quarter earnings call, Globe Life executives said the company's audit committee is hiring international law firm WilmerHale to conduct an investigation of the allegations.

"When complaints are raised, including complaints alleging fraud, deceit, unethical business practices, or other misconduct, American Income has a dedicated group responsible for investigating these allegations," said co-CEO J. Matt Darden. "American Income has not hesitated to take disciplinary actions against agents and agency owners where warranted, including termination and notice to the appropriate regulatory bodies."

InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.