Wells Fargo facing insurance license discipline
Department alleges poor oversight of incentive compensation program led to license violations
SACRAMENTO, CA — Wells Fargo was served with an accusation by the California Department of Insurance seeking to suspend or revoke its licenses for alleged improper insurance sales practices related to the company’s online insurance referral program. Such practices resulted in insurance products being purchased for consumers without their knowledge.
The accusation is the result of a department investigation that found that from 2008 to 2016, Wells Fargo customers were issued approximately 1,500 insurance policies and charged premiums without their knowledge or permission. The department is seeking to suspend or revoke Wells Fargo’s licenses to transact personal insurance in California.
“Companies that are licensed to transact insurance have an obligation to act with integrity, comply with all state and insurance laws and represent the best interests of consumers,” said Insurance Commissioner Dave Jones. “When any producer violates consumer trust in the name of profit, it reflects poorly on the entire profession.”
In 2016, Wells Fargo paid $185 million to government regulators to settle claims that the bank opened fraudulent deposit and credit card accounts. A bank review found that there were approximately 3.5 million unauthorized deposit and credit card accounts opened from 2009 to 2016. Bank employees opened these unauthorized accounts as part of an incentive compensation program that indirectly encouraged improper sales practices and was not adequately overseen by bank management.
Wells Fargo is expected to file a Notice of Defense.