State Officials Announce Conclusion of Insurance Case and Return of More than $160,000 to Maine Consumer

Completed Case Highlights Importance of  Reporting Concerns and Utilizing Bureau’s Resources

GARDINER – Governor Paul R. LePage and Maine Insurance Superintendent Eric Cioppa announced that a complaint investigation resulting in the return of more than $160,000 to a Maine consumer has been completed. The investigation, conducted by the Bureau of Insurance’s Consumer Health Care Division, involved insurance agent Paul E. Richard and American Equity, the insurance carrier he represented.

“Maine is fortunate to have a large number of insurance agents, agencies and companies that provide important products and services with integrity and concern for their clients,” Governor LePage said.  “In those cases, however, when consumers or business owners are taken advantage of, the Bureau of Insurance is available to provide guidance and to take effective action whenever possible.”

The investigation and subsequent hearing found that Richard had recommended that a seriously ill man in the Lewiston area surrender his $100,000 life insurance policy, which he and his wife had paid premiums on for nearly 20 years. Richard recommended that the couple use the $11,935 cash value of the policy along with other assets, to purchase several annuities totaling $46,770, for which he received $4,775 in commissions.

After the death of her husband, which occurred just over a year later, the consumer filed a complaint with the Bureau. Following an enforcement action and hearing, Richard’s insurance producer license was revoked and he was ordered to pay a civil penalty of $12,500 to the State of Maine and restitution to the consumer equal to the full amount of the commissions and fees he received, plus interest. (A copy of the decision and order is available on the Bureau’s website at The $12,500 civil penalty represented the maximum amount for each of the following ten violations:

Violation 1: $1500 for persuading someone with a disabling and degenerative condition to surrender his life insurance policy, in violation of 24-A M.R.S.A. §§ 1420‑K(1)(H), 2152, and 2155.

Violations 2–4: $1500 each for intentionally failing to disclose, on each of three annuity applications, that the new annuities were replacing existing policies

Violations 5–7: $1500 each for instructing the consumers to deposit the proceeds of the asset liquidations into the wife’s personal account and pay for each of three annuities by personal check, in order to conceal the source of funds.

Violations 8–10: $1500 with respect to the nonqualified annuity that replaced the life insurance policy, and $250 each with respect to the two qualified annuities, for selling annuities without conducting any meaningful inquiry into their suitability for the consumers, and without making a meaningful effort to ensure that the consumers understood what they were buying.

American Equity terminated the agent’s appointment with the company, following its own investigation, and paid the consumer the lost value of the $100,000 insurance policy, plus interest, and refunded the purchase price of all three annuities plus interest, without imposing surrender penalties. In addition, the company paid a $50,000 civil penalty to the State. (A copy of the consent agreement is available on the Bureau’s website

Last month, the investigation was closed when, following a collections action initiated by the Attorney General’s Office against Richard, the final funds were paid and distributed.

“We are happy that this matter was brought to our attention and that we were able to assist in rectifying this situation for the consumer, who had suffered substantial financial loss as a result of this agent’s actions,” Superintendent Cioppa stated. “We encourage anyone with questions about life insurance, annuities or other insurance types, or anyone seeking information about insurance agents and brokers, to contact the Bureau by calling toll-free 1-800-300-5000 or e-mailing”



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