Wells Fargo was served with an accusation by the CaliforniaDepartment of Insurance seeking to suspend or revoke itslicenses to transact personal insurance for alleged improperinsurance sales practices related to the company's online insurancereferral program.
|The accusation is the result of a department investigation that found that from2008 to 2016, Wells Fargo customers were issued approximately 1,500insurance policies and charged premiums without their knowledge orpermission.
|"Companies that are licensed to transact insurance have anobligation to act with integrity, comply with all state andinsurance laws and represent the best interests of consumers," saidInsurance Commissioner Dave Jones. "When any producer violatesconsumer trust in the name of profit, it reflects poorly on theentire profession."
|Related: Will Wells Fargo & Co. sell its insurancebrokerage business?
|History of regulatory woes
Unfortunately for Wells Fargo's insurance practice, this is notits first offense.
|In July, the company planned to compensate m9ore than 500,000borrowers who were unwittingly sold car insurance. Despiteits questionable practices, the company was surrounded by a majorscandal on the banking side last year.
|In 2016, Wells Fargo paid $185 million to government regulatorsto settle claims that the bank opened fraudulent deposit and creditcard accounts. A bank review found that there were approximately3.5 million unauthorized deposit and credit card accounts openedfrom 2009 to 2016. Bank employees opened these unauthorizedaccounts as part of an incentive compensation program thatindirectly encouraged improper sales practices and was notadequately overseen by bank management.
|Wells Fargo is expected to file a Notice of Defense.
|Related: Wells Fargo insurance abuses spur probe byCalifornia regulator
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