(Washington, DC) The District of Columbia Department of Insurance, Securities and Banking (DISB) joined more than 40 state insurance departments in signing a multi-state regulatory settlement with three Waco, Texas-based life insurance companies involved in the improper sale of insurance and investment products to US military service members. The District of Columbia signed onto the settlement agreement on July 24, which became effective on July 28, 2006.

“The District of Columbia joins other state insurance regulators in protecting our military service men and women, many of whom are young and financially inexperienced,” said DISB Commissioner Thomas E. Hampton. “This settlement shows the great success that federal and state regulators can have when working together to prevent and detect deceptive sales practices.”

The settlement requires American-Amicable Life Insurance Company of Texas and its two affiliates, Pioneer American Insurance Company and Pioneer Security Life Insurance Company, to provide immediate cash refunds and increased policy benefits totaling $70 million to approximately 92,000 policyholders.

Of those policyholders, 57,000 current and former service members will receive cash refunds and modifications to their existing insurance policies, if active. An additional 13,000 service members and 22,000 civilians will receive increased cash surrender benefits.

The settlement agreement, which culminated a 20-month investigation led by the Texas and Georgia insurance departments, the US Department of Justice and the US Securities and Exchange Commission, alleges that the American-Amicable companies violated insurance and consumer protection statutes in the sale and marketing of certain life insurance products to US service members. The term life policies sold primarily to military personnel were often represented as investment products.