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Wells Fargo, accused of signing up customers for unneeded insurance, could face sanctions from California

James Rufus Koren, Los Angeles Times on

Published in Business News

"Companies that are licensed to transact insurance have an obligation to act with integrity, comply with all state and insurance laws and represent the best interests of consumers," California Insurance Commissioner Dave Jones said in a statement. "When any producer violates consumer trust in the name of profit, it reflects poorly on the entire profession."

Problems with the bank's insurance sales practices first came to wide attention a year ago, when three former Prudential employees sued the insurer, claiming they had been fired for raising concerns about policies sold through Wells Fargo.

They alleged that many Prudential policies sold through the bank appeared to be linked to bogus email addresses and that many customers canceled their policies after paying a single monthly premium.

Pulley said the bank started an internal review of those products and has been cooperating with the state Insurance Department's investigation. It suspended offerings of renters and life insurance policies last year.

The department said it has found 1,258 unauthorized renters insurance policies from American Modern; 187 life insurance policies from Great-West Financial; 18 life insurance policies from Prudential; and six renters insurance policies from Assurant.

Wells Fargo has had other insurance problems, though not related to its insurance referral program. The bank acknowledged earlier this year that it improperly charged hundreds of thousands of auto-loan customers for car insurance policies they did not need.

 

The bank said it would pay $80 million in refunds and compensation to harmed borrowers, including some 20,000 customers who fell into default and had their cars repossessed because of the added cost of the unneeded policies.

Insurance has been a small fraction of Wells Fargo's overall business, generating revenue of $1.3 billion last year out of the bank's total revenue of $88.3 billion.

(c)2017 Los Angeles Times

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