American Bankers Insurance Group (ABIG) will have to pay a $3 million fine that had been on hold as part of a consent order dating back to 1998.

According to the National Association of Insurance Commissioners, 43 states and Washington, D.C., banded together to conduct a market conduct examination in 1998. At that time, ABIG was licensed to sell insurance in 50 states. The company offers a variety of products, including life and health insurance.

After multistate discussions about ABIG's compliance with individual state insurance laws, an investigation of the company's business practices unearthed violations including marketing and sales violations, use of unlicensed insurance agents, and improper claims handling. The company was accused in several states, including Minnesota and Tennessee, of selling insurance policies not approved by the state, meaning policyholders may not get what they were paying for.

American Bankers signed a consent order in 1998 for all 43 states promising to:

• Pay states a monetary sanction of $12 million.
• Submit to an on-site market conduct examination and pay an additional $3 million in sanctions if the company failed the review.
• Audit all transactions between May 27 and Nov. 23, 1998, and pay any appropriate refunds or additional claim payments identified.
• Draw up and follow a compliance plan.
• File monthly reports to each state on the progress of the compliance plan.

In August 1999, ABIG was purchased by Fortis, an international insurance, banking, and investment company. ABIG was merged with the American Security Group to form a credit-related insurance company renamed Assurant Group. Fortis says it assumed outstanding debt of ABIG, although it was unclear if that included ABIG's sanctions.

ABIG has again failed the market examinations. As a result of the most recent on-site market examinations, ABIG will be required to pay the additional $3 million in sanctions it agreed to when it signed the consent order. The market conduct examinations were led by NAIC Secretary-Treasurer and Illinois Insurance Director Nat Shapo and Maryland Insurance Commissioner Steve Larsen.