Northwestern Mutual To Pay Vermont $287K For Policy Underpayments

The Vermont Department of Financial Regulation reached a consent order agreement last week with the Northwestern Mutual Life Insurance Co. for improperly calculating interest amounts that resulted in underpayments to life insurance policy beneficiaries.

Under the terms of the settlement, Northwestern Mutual will pay a $287,000 administrative penalty and will be required to report quarterly to the Department on its claims payments for the next two years. Northwestern Mutual also provided in full restitution to all Vermonters who were underpaid.

“Our Department strives to ensure Vermonters receive the full benefit of their bargain and the full protection of our laws. I am pleased Northwestern Mutual provided restitution to every impacted Vermonter and agreed to a substantial penalty to resolve this matter,” said DFR Commissioner Michael S. Pieciak. “The settlement also ensures this will not happen again by requiring Northwestern Mutual to change its procedures and system safeguards.”

Since the investigation process began, Northwestern Mutual provided accurate information, initiated a comprehensive system overhaul, and made verifiable improvements to its supervisory procedures by implementing a detailed compliance program and enhanced reporting, state officials said in a news release. Northwestern Mutual’s response was "forthcoming, detailed, and timely," the release said.

Vermonters with concerns about life insurance interest payments, or other insurance concerns, should contact the DFR consumer services section by phone at 802-828-3302 or 800-964-1784, or by email at [email protected].

This report compiled by InsuranceNewsNet staff.