Pierce National Life hit with $20,000 fine.Pierce National Life hit with $20,000 fine A small Los Angeles County life insurance company recently agreed to pay a $20,000 fine for violating a California Department of Insurance order prohibiting it from soliciting or selling any new or renewal policies in California. While Pierce National Life Insurance Co. will now be allowed to resume soliciting and selling policies, the fine is the latest chapter in a continuing dispute with the state over the company's financial health and its ties to its owner, Washington multimillionaire Joseph Allbritton. Still in effect is a provision of the order prohibiting the company from paying future dividends to stockholders and making transactions with Allbritton or any of Allbritton's companies. Allbritton, chairman of Riggs National Bank, the largest bank based in the District of Columbia, in July agreed to pay back a $12 million dividend Pierce had earlier paid him. The dividend, deemed illegal by the Department of Insurance, was in part responsible for the insurer falling into hazardous financial condition. The company's capital surplus Capital Surplus Equity which cannot otherwise be classified as capital stock or retained earnings. It's usually created from a stock issued at a premium over par value.Notes: Capital surplus is also known as share premium (UK), acquired surplus, donated surplus, paid-in surplus, or additional paid-in capital. See also: Capital, Equity, Retained Earnings - its cushion against policyholder claims - was well below the legal minimum when a cease and desist order against issuing new insurance was handed down June 29. Insurance Commissioner John Garamendi said that with the payment, the company may soon be in the department's good graces Graces, in Greek mythology, personifications of beauty, charm, and grace; daughters of Zeus and the oceanid Eurynome. Also known as the Charites, they were usually three in number and were called Aglaia, Thalia, and Euphrosyne. The Graces were associated with Aphrodite and those gods associated with the arts, such as the Muses. In Rome they were called Gratiae.. "The response from Pierce National Life Insurance Co. to quickly remedy their insolvent situation and get back on the road to operating a sound and credible business is a positive sign that the company plans to use better judgement when conducting business in California." The department charged the insurance company with paying illegal dividends to Allbritton after manipulating its accounting records and artificially inflating earnings. An attorney for Allbritton denied that his client committed any improper actions. |
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion