Insurance - Regulatory

Our insurance regulatory and litigation team works side-by-side with multi-national and regional insurance companies, financial services firms and their in-house and outside counsel. We have served as investigators on behalf of clients, running their internal U.S. and international fact-finding efforts, so that management and counsel are in command of the facts in order to make the best-informed decisions while engaged in disputes, litigation, or regulatory inquiries and actions. Our role in both internal and regulatory investigations and litigation is that of a partner to our clients and their counsel, bringing our technical, industry, fact-finding, analysis and managerial expertise to address the issues.

Our insurance experts have frequently been retained to consult or testify regarding suitability and sales practices of life insurance and annuity products.  Accordingly, Bates is uniquely qualified to assist our clients in navigating the evolving regulatory requirements regarding the standard of care.

We are frequently retained to assist our clients in regulatory matters brought by federal and state regulators:

  • Bates Group was retained to assist an insurance carrier during a FINRA investigation alleging the carrier’s misrepresentations, suitability violations, and supervision in connection with sales and replacements of variable annuities.  We analyzed thousands of pages of contract applications and internal documents pertaining to over 500 variable annuity exchanges to compile a database of annuity transactions.  Data validation techniques were used to check the consistency and accuracy of the dataset.  Once validated, the database was used to generate summary reports and schedules detailing our findings related to the alleged misrepresentations and omissions, which allowed counsel to rebut allegations and negotiate a more favorable result.  During the investigative process, Bates’ experts also consulted on the suitability and supervision of the annuity transactions.

  • As state regulators investigated an association’s deficient pre-need trust which held hundreds of variable life insurance policies, we were asked by counsel representing a financial services firm to analyze tens of thousands of pages of documents and perform a profit/(loss) analysis for each contract within the trust. Bates also constructed thousands of hypothetical scenarios comparing actual contract performance to various benchmarks to assess potential damage scenarios. Additionally, we analyzed millions of transactions within the client’s mainframe database and accounting system to provide counsel with insight and guidance regarding damages during the resolution process.

  • In another state regulatory matter involving a financial services firm, Bates Group worked directly with inside counsel to prepare an economic benefit analysis showing the impact of dozens of variable annuity switches.  The analysis used internal reports as well as Morningstar to evaluate the switches at the policy, benefit and fund levels.  Our analyses included review of surrender charges and premium enhancements to evaluate the potential damages associated with alleged variable annuity sales practice violations.  Bates also provided a substantive suitability review of selected switches.  In addition, we assisted counsel during this investigation by reviewing the damage calculations provided by the state and providing clarification regarding the calculation methodology. 

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