DFR Orders Insurance Company to pay $300,000 for Supervisory Failures

01 April 2019

Montpelier, VT – (April 1, 2019) — The Department of Financial Regulation (DFR) has entered into a Stipulation and Consent Order with The Lafayette Life Insurance Company (Lafayette) for its failure to properly supervise its Vermont insurance agents. Under the terms of the settlement, Lafayette will pay a $300,000 administrative penalty and make several improvements to its supervisory procedures, including annual training and enhanced reporting.

DFR reviewed all 163 annuity transactions Lafayette made in Vermont during a five-year period and determined that in each instance the company failed to obtain appropriate financial and background information. Without this information, Lafayette was unable to independently determine whether its products were appropriate for the consumers purchasing them.

“The department’s top priority is ensuring Vermonters get a fair shake from the financial services firms that do business in our state and it concerns us greatly when a firm’s supervisory controls designed to protect consumers fail,” said DFR Commissioner Michael Pieciak. “In this instance, I am pleased that Lafayette cooperatively worked with our department and took this matter seriously by hiring new personnel, changing its procedures, and implementing a training program to prevent this from happening again.”

This investigation relates to a 2016 DFR action against Newport, Vermont insurance agent Alan Dauphin, an agent with Lafayette. That action resulted in a $10,000 administrative penalty and other remedial action.

Vermonters who have purchased a Lafayette annuity product and are concerned about its appropriateness are encouraged to contact DFR’s consumer services department by phone at 802-828-3302 or 800-964-1784, or by email at dfr.insuranceinfo@vermont.gov.

Commissioner Pieciak would like to thank the department staff who worked diligently on these matters, including: Izzi Kaiser, Marcia Violette, Phil Keller, Chris Rouleau, Emily Kisicki, Jennifer Rood, and Brenda Clark.

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Department of Financial Regulation
Commissioner Michael Pieciak
89 Main Street, Montpelier, VT 05620 - 3101
802-828-3301

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