April 13, 2020
DFS SUPERINTENDENT LINDA A. LACEWELL ANNOUNCES ATHENE HOLDING LTD. TO PAY $45 MILLION TO NEW YORK STATE FOR UNLICENSED PENSION RISK TRANSFER BUSINESS
Athene’s Pension Risk Transfer Business Solicited Business in New York and Placed Group Annuity Contracts with an Unlicensed Athene Subsidiary
Settlement is DFS’ First Enforcement Action in the Pension Risk Transfer Market, Part of Ongoing, Industry-Wide Investigation
Superintendent of Financial Services Linda A. Lacewell announced today that Athene Holding Ltd. will pay a $45 million penalty to New York State for New York Insurance Law violations related to its subsidiary Athene Annuity & Life Company (“Athene”) and its pension risk transfer business. The New York State Department of Financial Services (DFS) uncovered that Athene solicited and did insurance business in New York without a license.
"Protection of New Yorkers' retirement plans is more important than ever in this vulnerable economy. The DFS license has always served to safeguard retirement investments," said Superintendent Lacewell. "Unlicensed insurance activity puts retirement assets at risk and that’s why we won’t tolerate it."
Athene entered into 14 large-scale pension risk transfer transactions involving thousands of New York policyholders, two of which involved New York-based plan sponsors covering tens of thousands of individual policyholders. In contracting these transactions, Athene engaged in thousands of unauthorized communications with New York-based plan sponsors.
In a typical pension risk transfer transaction, a plan sponsor, usually an employer offering pension plan protection to its employees, transfers all or a portion of the assets and liabilities of a defined benefit pension plan to a life insurance company, which, in turn, issues a Group Annuity Contract (GAC) obligating the life insurance company to make benefit payments to plan participants or to the plan sponsor.
As part of its agreement with DFS, Athene will transfer the handling of transactions from Athene Annuity & Life Company to its New York-based subsidiary, Athene Annuity & Life Assurance Company of New York.
In September of 2019, after learning that unauthorized life insurers and their representatives were operating in the pension risk transfer market, Superintendent Lacewell issued a circular letter to all life insurers and insurance producers advising them of their obligations under New York Insurance Law and directing insurers and producers to fix any violations.
DFS is actively investigating other potential violations in the pension risk transfer market and is also working with Athene and others in the market to bring the entire New York industry into compliance with New York Insurance Law.