320 W. Washington Street
Springfield, Illinois 62767
(217) 782-4515
http://insurance.illinois.gov
Illinois Department of Insurance
JB Pritzker
Governor
Dana Popish Severinghaus
Director
VI
A ELECTRONIC MAIL
J
une 1, 2023
Mr. Will Fuller, President and C.E.O.
c/o Mary Quell
Transamerica Life Insurance Company
6400 C Street SW
Cedar Rapids, IA 52499
Re
: Transamerica Life Insurance Company, NAIC 86231
Market Conduct Examination Report Closing Letter
D
ear Mr. Fuller:
T
he Department has received your Company’s proof of compliance. Therefore, the Department is closing its file
on this exam.
I
intend to ask the Director to make the Examination Report and Stipulation and Consent Order available for public
inspection as authorized by 215 ILCS 5/132. At the Department’s discretion, specific content of the report may be
subject to redaction for private, personal, or trade secret information prior to making the report public. However,
any redacted information will be made available to other regulators upon request.
Please contact me if you have any questions.
S
incerely,
Erica Weyhenmeyer
Chief Market Conduct Examiner
Illinois Department of Insurance
320 West Washington St., 5th Floor
Springfield, IL 62767
Phone: 217-782-1790
E-mail: Erica.Weyhenmeyer@Illinois.gov
1
Illinois Department of Insurance
Market Conduct Examination
of
Transamerica Life Insurance Company
2
MARKET CONDUCT EXAMINATION REPORT
DATE OF EXAMINATION: January 10, 2022, through October 25, 2022
EXAMINATION OF: Transamerica Life Insurance Company NAIC Number: 86231
STATUTORY HOME OFFICE: 6400 C Street SW Cedar Rapids, IA 52499
EXAMINATION PERIOD: October 1, 2020, through September 30, 2021
COMPLAINTS PERIOD: April 1, 2019, through September 30, 2021
EXAMINERS: Alan Klinc, MCM
John Drake, AIE, MCM, APIR, ChFC, CLU, RHU, FLMI, HIA
Chris Heisler, Examiner-in-Charge, CIE, MCM, FLMI, ARC
3
INDEX
Page
I. FOREWORD 4
II. SCOPE OF EXAMINATION 5
III. COMPANY PROFILE 6
IV. SUMMARY 8
V. METHODOLOGY 12
VI. SELECTION OF SAMPLES 14
VII. FINDINGS 15
A. Claim Practices 15
B. New Business Practices 19
C. Producer Licensing 20
D. Policy Services 20
E. Complaints and Litigation 21
4
I. FOREWORD
This is a comprehensive market conduct examination report of the Transamerica Life Insurance Company
(NAIC Code 86231).
This examination report is generally a report by exception. However, failure to criticize specific practices,
procedures or files does not constitute approval thereof by the Illinois Department of Insurance.
During this examination, examiners cited errors made by the Company. Statutory citations were as of the
examination period unless otherwise noted.
5
II. SCOPE OF THE EXAMINATION
The Department has the authority to conduct this examination pursuant to, but not limited to, 215 ILCS
5/132.
The purpose of the examination was to determine if the Company complied with Illinois statutes, and
Illinois Administrative Code and to consider whether the Company’s operations are consistent with public
interest. The primary period covered by this review was October 1, 2020, through September 30, 2021, for
claims and April 1, 2019, through September 30, 2021, for complaints unless otherwise noted. Errors
discovered outside the period of the examination may also be included in the report.
The examination was a comprehensive examination involving the following business functions of the indi-
vidual life insurance, group life insurance, individual annuity, group annuity and long-term care lines of
business: new business, replacements, policy service, claims handling practices and handling of consumer
and Department complaints.
In performing this examination, the examiners reviewed a sample of the Company’s practices, procedures,
extra-contractual claim adjudication guidelines and files. Therefore, some noncompliant events may not
have been discovered. As such, this report may not fully reflect all the practices and procedures of the
Company. As indicated previously, failure to identify or criticize improper or noncompliant business
practices in this state or other jurisdiction does not constitute acceptance of such practices.
6
III. COMPANY PROFILE
History:
The Company was originally licensed on March 19, 1962, following incorporation on April 19,
1961, in the state of Wisconsin, as a legal reserve life insurance company. The Company's original name
was American Public Life Insurance Company, Inc. and it operated as a member of the Northwestern Na-
tional Insurance Group. At the annual meeting of the shareholders held on April 9, 1968, the name change
to NN Investors Life Insurance Company, Inc., was approved.
Life Investors Insurance Company of America acquired 100% of the outstanding stock of the Company
from NN Corporation on December 31, 1975, and the executive office was moved to Cedar Rapids, Iowa.
On June 30, 1976, the domicile of the Company was changed from the state of Wisconsin to the state of
Iowa pursuant to the provisions of Chapter 508, Code of Iowa.
At a special meeting of the shareholders on June 28, 1982, Articles of Merger between the Company and
Investors Fidelity Life Insurance Company were approved with the Company being the survivor. The ef-
fective date of the merger was June 30, 1982.
At a special meeting of the shareholders on September 30, 1985, Articles of Merger between the Company
and Investors Life of Florida Insurance Company were approved with the Company being the survivor. The
effective date of the merger was January 24, 1986.
At the annual meeting on April 26, 1990, the shareholders approved changing the name of the Company to
PFL Life Insurance Company effective January 1, 1991. The Company merged with two affiliated life
insurers, National Old Line Life Insurance Company, domiciled in the state of Arkansas, and Pacific Fidel-
ity Life Insurance Company, domiciled in the state of California, with the Company being the surviving
entity. Effective dates of these mergers were January 1, 1991, and March 31,1991, respectively.
Effective March 1, 2001, the Company’s name was changed to Transamerica Life Insurance Company.
Effective October 1, 2004, an affiliated Missouri domiciled life insurer, Transamerica Assurance Company,
was merged into the Company.
Effective October 1, 2005, Transamerica Life Insurance and Annuity Company merged into the Company.
Effective October 1, 2008, an affiliated Iowa-domiciled life insurer, Transamerica Occidental Life Insur-
ance Company (TOLIC), was merged into the Company.
Effective October 2, 2008, an affiliated Iowa-domiciled life insurer, Life Investors Insurance Company of
America, was merged into the Company.
Operations:
Transamerica Life Insurance Company (Transamerica) is licensed in all states (except New York where
Transamerica Financial Life Insurance Company is licensed) and the District of Columbia. The primary
offices are in Cedar Rapids, Iowa; Denver, Colorado; and Baltimore, Maryland. There are additional offices
located throughout the United States. Transamerica provides a wide range of life insurance, long-term care
(LTC) insurance and voluntary benefits (including supplemental health insurance), retirement plans,
recordkeeping and advisory services, annuities, mutual funds and other long-term savings and investment
products.
7
Transamerica’s organizational structure features two business lines – Individual Solutions and Workplace
Solutions – supported by Transamerica Corporate (Corporate Development, Finance,
Internal Audit, Legislative, Regulatory & Policy, Office of the CEO, People, Places & Brand, Risk, and
Technology). The business line and corporate leaders report directly to Transamerica's
President & CEO Will Fuller.
Written premium and market share in Illinois per the NAIC Market Analysis Review System are as follows:
Line of Business
2020
Premiums
Written
2020
Market
Share
2019
Premiums
Written
2019
Market
Share
Individual Life
$160,876,741
2.816%
$97,934,544
1.543%
Group Life
$11,048,558
0.719%
$10,816,686
0.627%
Individual Annuities
$125,397,417
1.565%
$162,812,474
1.968%
Group Annuities
$762,872
0.024%
$406,811
0.12%
8
IV. SUMMARY
A comprehensive market conduct examination of Transamerica Life Insurance Company was performed to
determine compliance with Illinois statutes and Illinois Administrative Code.
The following represents a summary of findings; however specific details are found in each section of the
report.
TABLE OF TOTAL VIOLATIONS
Crit #
Description of Violations
Files
Reviewed
Number of
Violations
Findings
Section
Error %
6
215 ILCS
5/224(1)(l)
Paid Claims Individual Life -
Failure to notify beneficiary at
time of claim of statutory interest
provision.
108
69
A.1 64%
7
50 IAC
919.70(a)(2)
Paid Claims Individual Life -
Failure to provide Notice of
Availability of the Department of
Insurance on delay letter.
108
10 A.1 9%
13
50 IAC
919.50(a)(1)
Denied Claims Individual Life -
Failure to provide Notice of
Availability of the Department of
Insurance on denial letter.
75
9 A.2 12%
14
50 IAC
919.70(a)(2)
Denied Claims Individual Life -
Failure to provide Notice of
Availability of the Department of
Insurance on delay letter.
75
5
A.2 7%
15
215 ILCS
5/224(1)(l)
Denied Claims Individual Life -
Failure to notify beneficiary at
time of claim of statutory interest
provision.
75
15 A.2 20%
20
50 IAC
919.70(a)(2)
Paid Claims Individual Life
Waiver of Premium - Failure to
provide Notice of Availability of
the Department of Insurance on
delay letter.
6
4 A.3 67%
19
50 IAC
919.50(a)(1)
Denied Claims Individual Life
Waiver of Premium - Failure to
provide Notice of Availability of
the Department of Insurance on
denial letter.
7
7 A.4 100%
8
50 IAC
919.70(a)(2)
Paid Claims Group Life - Failure
to provide Notice of Availability
of the Department of Insurance
on delay letter.
109
15 A.5 14%
9
50 IAC
919.70(a)(2)
Paid Claims Group Life - Failure
to notify the insured’s benefi-
ciary with a reasonable written
explanation for delay beyond 45
days.
109
1 A.5 1%
11
215 ILCS
5/154.6(i) &
50 IAC
919.50(a)
Paid Claims Group Life – Failure
to affirm or deny claims within a
reasonable time after proof of
loss statements have been com-
pleted.
109
3 A.5 2.7%
9
TABLE OF TOTAL VIOLATIONS
Crit #
Description of Violations
Files
Reviewed
Number of
Violations
Findings
Section
Error %
24
215 ILCS
5/154.6 (c)
Paid Claims Group Life - Failure
to adopt and implement reasona-
ble standards for the prompt in-
vestigation and settlement of
claims arising under its policies.
109
2 A.5 1.8%
32
215 ILCS
5/154.6 (c)
Paid Claims Group Life - Failure
to adopt and implement reasona-
ble standards for the prompt in-
vestigation and settlement of
claims arising under its policies.
General
Claim Prac-
tice
General
Claim Prac-
tice
A.5
General
Claim
Practice
17
50 IAC
919.50(a)(1)
Denied Claims Group Life - Fail-
ure to provide Notice of Availa-
bility of the Department of Insur-
ance on denial letter.
48 16
A.6 33%
18
50 IAC
919.70(a)(2)
Denied Claims Group Life - Fail-
ure to provide Notice of Availa-
bility of the Department of Insur-
ance on delay letters.
48
15 A.6 31%
38
50 IAC
919.70(a)(2)
Paid Claims Long-Term Care -
Failure to provide Notice of
Availability of the Department of
Insurance on delay letters.
76
21 A.8 28%
30
50 IAC
919.70(a)(2)
Closed Claims Without Payment
Long-Term Care - Failure to pro-
vide Notice of Availability of the
Department of Insurance on de-
lay letters.
25
7 A.9 28%
31
50 IAC
919.70(a)(2)
Closed Claims Without Payment
Long-Term Care - Failure to no-
tify insured claimant with a rea-
sonable written explanation for
delay beyond 45 days.
25
1 A.9 4%
35
50 IAC
919.70(a)(2)
Denied Claims Long-Term Care
- Failure to provide Notice of
Availability of the Department of
Insurance on delay letters.
47
6 A.10 13%
37
50 IAC
919.70(a)(2)
Appealed Claims Long-Term
Care - Failure to provide Notice
of Availability of the Department
of Insurance on delay letters.
34
15 A.11 44.1%
3
50 IAC
919.70(a)(2)
Paid Claims Individual Annuity -
Failure to provide Notice of
Availability of the Department of
Insurance on delay letters.
105
16 A.12 15.2%
4
50 IAC
919.70(a)(2)
Paid Claims Individual Annuity -
Failure to notify insured’s benefi-
ciary with a reasonable written
explanation for delay beyond 45
days.
105
5 A.12 4.8%
10
50 IAC
919.70(a)(2)
Paid Claims Group Annuity -
Failure to provide Notice of
Availability of the Department of
Insurance on delay letters.
76
4 A.13 5.3%
10
TABLE OF TOTAL VIOLATIONS
Crit #
Description of Violations
Files
Reviewed
Number of
Violations
Findings
Section
Error %
12
50 IAC
919.70(a)(2)
Paid Claims Group Annuity -
Failure to notify insured’s benefi-
ciary with a reasonable written
explanation for delay beyond 45
days.
76
1 A.13 1.3%
16
215 ILCS
5/154.6(i) &
50 IAC
919.50(a)
Paid Claims Group Annuity –
Failure to affirm or deny claims
within a reasonable time after
proof of loss statements have
been completed.
76
1 A.13 1.3%
28
50 IAC
917.70(b)(c)
New Business Individual Life
Replacements – Failure to send
the Notice Regarding Proposed
Replacement of Life Insurance or
Annuity Form to existing insurer
within 3 working days.
83
55 B.2 66%
29
50 IAC
917.70(b)
New Business Individual Life
Replacements – Failure to re-
quire from producer the Notice
Regarding Proposed Replace-
ment of Life Insurance or Annu-
ity Form (Exhibit B).
83
8 B.2 10%
23
215 ILCS
5/1011(A)(1)(
2)
New Business Individual Life
Declined – Failure to provide ap-
plicant, policyholder or individ-
ual proposed for coverage with
specific reason for adverse under-
writing decision in writing.
113
1 B.3 1%
26
3120.50
(f)(1)(B) and
3120.60 (c)(1)
Insurance Pro-
New Business Annuity Issued –
Failure to establish a supervision
system designed to achieve the
insurers and its producer’s com-
pliance with required training.
79
2 B.5 3%
5
215 ILCS
5/500-85(a)
Producers Terminated for Cause
– Failure to provide notice of ter-
mination to the Director of Illi-
nois Department of Insurance.
1
1 C.3 100%
25
50 IAC
1405.30(c)
1405.40(c)(1)
Policy Loans Individual Life –
Failure to produce books and rec-
ords; failure to provide benefit on
a positive election basis; and fail-
ure to follow policyholder direc-
tion for benefit election.
86
6 D.1 7%
22
215 ILCS
5/234.1
Non-Forfeiture Options Individ-
ual Life – Failure to provide a list
of all available non-forfeiture op-
tions.
113
7 D.3 6.8%
21
215 ILCS
5/234.1
Non-Forfeiture Options Group
Life – Failure to provide a list of
all available non-forfeiture op-
tions.
14
13 D.4 92.2%
1 50 IAC 926.40
Department of Insurance Com-
plaints – Failure to respond to
IDOI by the time allotted.
128
4 E.2 3.1%
11
TABLE OF TOTAL VIOLATIONS
Crit #
Description of Violations
Files
Reviewed
Number of
Violations
Findings
Section
Error %
27 50 IAC 926.40
Department of Insurance Com-
plaints (Long-Term Care) – Fail-
ure to respond to IDOI by the
time allotted.
26 2
E.2 8%
12
V. METHODOLOGY
The market conduct examination covered the business written for the period of October 1, 2020, through
September 30, 2021. Complaints covered the period of April 1, 2019, through September 30, 2021.
Specifically, the examination focused on a review of the following areas:
1. Claims Analysis
2. New Business
3. Policy Service (policy loans, cash surrenders and non-forfeitures)
4. Consumer Complaints, Insurance Department Complaints and Litigation
The review of these categories was accomplished through examination of paid and denied claim files,
underwritten, and declined new business files, policy loans, cash surrendered policy files, extended term
and reduced paid-up policy files, Insurance Department, and consumer complaint files. Each of these
categories was examined for compliance with Department Regulations and applicable State Laws.
The report concerns itself with improper practices performed by the Company, resulting in a failure to
comply with Illinois statutes and/or administrative rules. Criticisms were prepared and communicated to
the Company addressing violations discovered in the review process. All valid criticisms were incorporated
in this report.
The following methods were used to obtain the required samples and to assure a methodical selection.
Claims Analysis
Claim surveys were selected using the following criteria:
1. Paid Claims - Payment for claims made during the examination period.
2. Denied Claims - Denial of benefits during the examination period for losses not covered by
policy provisions.
All claims were reviewed for compliance with policy contracts and endorsements, applicable sections
of the Illinois Insurance Code (215 ILCS 5/1 et seq.) and the Illinois Administrative Code (50 Ill. Adm.
Code 101 et seq.).
All median payment periods were measured from the date necessary proofs of loss were received to the
date of payment or denial to the insured or the beneficiary. The examination period for the claims
review was October 1, 2020, through September 30, 2021.
New Business
New Business surveys were selected using the following criteria:
1. Issued New Business – New policies underwritten and issued during the examination period.
2. Not Issued – Applications taken but not issued with a declination letter.
All files were reviewed for compliance with applicable sections of the Illinois Insurance Code (215
ILCS 5/1 et seq.) and the Illinois Administrative Code (50 Ill. Adm. Code 101 et seq.).
13
Policy Service
Policy service surveys were selected using the following criteria:
1. Policy Loans – Loans made during the examination period.
2. Cash Surrenders – Surrenders made during the examination period.
3. Non-forfeiture Options – Policies that lapsed due to non-payment of premiums and exercised the
option to Reduced Paid-Up Insurance or Extended Term Insurance.
Consumer, Insurance Department Complaints and Litigation
The Company provided all files relating to complaints received via the Department of Insurance as well
as those received directly by the Company from the insured or his/her representative. A copy of the
Company’s complaint register was also reviewed.
The Company provided a listing of all open and closed litigation files. A review was performed on the
closed litigation files.
Median periods were measured from the date of notification of the complaint to the date of response
by the Company. The period of review was April 1, 2019, through September 30, 2021.
14
VI. SELECTION OF SAMPLES
Transamerica Life Insurance Company
Survey
Population
#Reviewed
%Reviewed
CONSUMER COMPLAINTS
245
245
100%
DEPARTMENT OF INSURANCE COMPLAINTS
154
154
100%
CLOSED LITIGATION (Company-wide)
7
7
100%
CLAIMS ANALYSIS
Paid Individual Life
4,436
108
2%
Denied Individual Life
203
75
37%
Paid Individual Life Waiver of Premium
6
6
100%
Denied Individual Life Waiver of Premium
7
7
100%
Paid Group Life
10,137
159
2%
Denied Group Life
95
48
50%
Paid Group Life Waiver of Premium
37
37
100%
Paid Long-Term Care
203
76
37%
Closed Without Payment Long-Term Care
25
25
100%
Denied Long-Term Care
47
47
100%
Appeals Long-Term Care
34
34
100%
Paid Individual Annuity
1,188
105
9%
Paid Group Annuity
111
76
69%
Retained Asset Account Balances
54
54
100%
Retained Asset Account Activity
26
26
100%
NEW BUSINESS
Individual Life Issued
7,333
115
2%
Individual Life Replacements
658
83
13%
Individual Life Declined
1,014
113
11%
Individual Life Not Taken/Withdrawn
654
86
13%
Individual Annuity Issued
268
79
30%
Individual Annuity Replacements
13
13
100%
Individual Annuity Withdrawn
2
2
100%
PRODUCER LICENSING
Agent Licensing - First Year Commissions
8,272
293
4%
Agents Terminated
953
86
9%
Agents Terminated for Cause
1
1
100%
POLICY SERVICES
Individual Life Policy Loan Transactions
937
86
9%
Group Life Policy Loan Transactions
202
79
39%
Individual Life Non-Forfeiture Options
1,330
113
10%
Group Life Non-Forfeiture Options
14
14
100%
Individual Life Cash Surrenders
2,852
114
4%
Group Life Cash Surrenders
189
75
40%
Individual Annuity Cash Surrenders
2,582
114
4%
Group Annuity Cash Surrenders
87
46
53%
Long-Term Care Reinstatements
1
1
100%
Long-Term Care Reduce Coverage/Premium
311
27
9%
Long-Term Care Terminations/Lapses
1,133
108
10%
15
VII. FINDINGS
A. Claims Practices
• The examiners reviewed the Company’s claim practices determining its
efficiency in handling complaints, accuracy of payment, adherence to
contract provisions and compliance with Illinois laws and regulations.
a. Paid Individual Life Claims
• A review of 108 paid individual life claims produced two (2) criticisms.
Criticism 6 was issued to the Company. The Company failed to notify
beneficiaries at the time of claim of statutory interest provision for 69
claims as required by 215 ILCS 5/224(1)(l).
• Criticism 7 was issued to the Company. The Company failed to provide
the Notice of Availability of the Department of Insurance on the delay
letter for 10 claims as required by 50 Ill. Adm. Code 919.70(a)(2) and
919.40.
• The median for payment was 15 days.
b. Denied Individual Life Claims
• A review of 75 denied individual life claim files produced three (3) criti-
cisms. Criticism 13 was issued to the Company. The Company failed to
provide the Notice of Availability of the Department of Insurance on the
denial letter for seven (7) claims as required by 50 Ill. Adm. Code
919.50(a)(1) and 919.40.
• Criticism 14 was issued to the Company. The Company failed to provide
the Notice of Availability of the Department of Insurance on the delay
letter for five (5) claims as required by 50 Ill. Adm. Code 919.70(a)(2)
and 919.40.
• Criticism 15 was issued to the Company. The Company failed to notify
beneficiaries at the time of claim of statutory interest provision for 15
claims as required by 215 ILCS 5/224(1)(l).
• The median for denial was one (1) day.
c. Paid Individual Life Waiver of Premium
• A review of six (6) paid individual life waiver of premium claims pro-
duced one (1) criticism. Criticism 20 was issued to the Company. The
Company failed to provide the Notice of Availability of the Department
of Insurance on the delay letter for four (4) claims as required by 50 Ill.
Adm. Code 919.70(a)(2) and 919.40.
• The median for payment was 24 days.
d. Denied Individual Life Waiver of Premium
• A review of seven (7) paid individual life waiver of premium claims pro-
duced one (1) criticism. Criticism 19 was issued to the Company. The
Company failed to provide the Notice of Availability of the Department
of Insurance on the delay letter for seven (7) claims as required by 50 Ill.
Adm. Code 919.70(a)(2) and 919.40.
• The median for denial was seven (7) days.
16
e. Paid Group Life
• A review of 109 paid group life claims produced five (5) criticisms. Crit-
icism 8 was issued to the Company. The Company failed to provide the
Notice of Availability of the Department of Insurance on the delay letter
for 15 claims as required by 50 Ill. Adm. Code 919.70(a)(2) and 919.40.
• Criticism 9 was issued to the Company. The Company failed to notify
the insured’s beneficiary with a reasonable written explanation for delay
beyond 45 days for one (1) claim as required by 50 Ill. Adm. Code
919.70(a)(2).
• Criticism 11 was issued to the Company. The Company failed to affirm
or deny claims within a reasonable time after proof of loss statements had
been completed as required by 215 ILCS 5/154.6(i). In addition, the com-
pany failed to offer payment within 30 days for three (3) claims as re-
quired by 50 Ill. Adm. Code 919.50(a).
• Criticism 24 was issued to the Company. The Company failed to imple-
ment reasonable standards for prompt investigation and payment of
claims in two (2) sample files as required by 215 ILCS 5/154.6(c).
• Criticism 32 was issued to the Company. The Company failed to adopt
and implement reasonable standards for the prompt investigations and set-
tlement of claims arising under its policies as required by 215 ILCS
5/154.6(c). The Company utilizes an Affidavit of Heirship signed by a
beneficiary for benefit payout and may not always collect, identify and
investigate inconsistences.
• Generally, the group life policies and certificates have a default benefi-
ciary designation that the beneficiary shall be (in order) the spouse, par-
ents, lawful children (natural or step), or estate of the insured. The insured
certificate holder has an opportunity at any time to declare a beneficiary
to the Company.
• The Company’s current process is to accept notice of claim from whom-
ever contacted the Company to report the death. The Company attempts
to collect information about family members and possible beneficiaries
during the notice of claims and when there is not a named beneficiary,
sends to default beneficiaries identified under the policy Affidavit of Heir-
ship with the claims packet. The Company then processes the claim upon
receipt of the Affidavit(s) without further searching to verify that the cer-
tifications made by the claimant(s) on the received Affidavits are accurate
or complete. The Examiner found examples of forms and claims filed that
were not complete and accurate (refer to Criticism 24) where there is clear
evidence from either readily available public documents (obituaries) or
certified copies of death certificates on file with the Company that contain
evidence of inaccurate claims certifications and that other rightful benefi-
ciaries existed. In most cases, the Company also has the funeral home and
funeral director at its disposal as a resource for determining who is a po-
tential beneficiary.
• The Company relies on the Affidavit and may not always seek to validate
their certifications against other sources of information. The Department’s
17
position is that reliance solely on an Affidavit from a beneficiary(s) does
not satisfy the requirements to adopt and implement reasonable standards
for the prompt investigations and settlements of claims. Therefore, the
Company is in violation of 215 ILCS 5/154.6(c) The Company has by its
current process and procedures, failed to adopt and implement reasonable
standards for the prompt investigations and settlement of claims increas-
ing the risk of inaccurate certifications and depriving other rightful bene-
ficiaries of their contractual benefits.
• The median for payment was 16 days.
f. Denied Group Life
• A review of 48 denied group life claims produced two (2) criticisms. Crit-
icism 17 was issued to the Company. The Company failed to provide the
Notice of Availability of the Department of Insurance on the denial letter
for 16 claims as required by 50 Ill. Adm. Code 919.50(a)(1) and 919.40.
• Criticism 18 was issued to the Company. The Company failed to provide
the Notice of Availability of the Department of Insurance on the delay
letter for 15 claims as required by 50 Ill. Adm. Code 919.70(a)(2) and
919.40.
• The median for denial was nine (9) days.
g. Paid Group Life Waiver of Premium
• A review of 37 paid group life waiver of premium claims produced no
criticisms.
• The median for payment was 15 days.
h. Paid Long-Term Care
• A review of 76 paid long-term care claims produced one (1) criticism.
Criticism 38 was issued to the Company. The Company failed to provide
the Notice of Availability of the Department of Insurance on the delay
letter for 21 claims as required by 50 Ill. Adm. Code 919.70(a)(2) and
919.40.
• The median for payment was 16 days.
i. Closed Without Payment Long-Term Care
• A review of 25 closed without payment long-term care claims produced
two (2) criticisms. Criticism 30 was issued to the Company. The Com-
pany failed to provide the Notice of Availability of the Department of In-
surance on the delay letter for seven (7) claims as required by 50 Ill. Adm.
Code 919.70(a)(2) and 919.40.
• Criticism 31 was issued to the Company. The Company failed to notify
the insured with a reasonable written explanation for delay beyond 45
days for one (1) claim as required by 50 Ill. Adm. Code 919.70(a)(2).
• The median for closure was 16 days.
j. Denied Long-Term Care
18
• A review of 47 denied long-term care claims produced one (1) criticism.
Criticism 35 was issued to the Company. The Company failed to provide
the Notice of Availability of the Department of Insurance on the delay
letter for six (6) claims as required by 50 Ill. Adm. Code 919.70(a)(2) and
919.40.
• The median for denial was 16 days.
k. Appeals Long-Term Care
• A review of 34 appeals long-term care claims produced one (1) criticism.
Criticism 37 was issued to the Company. The Company failed to provide
the Notice of Availability of the Department of Insurance on the delay
letter for 15 claims as required by 50 Ill. Adm. Code 919.70(a)(2) and
919.40.
l. Paid Individual Annuity
• A review of 105 paid individual annuity claims produced two (2) criti-
cisms. Criticism 3 was issued to the Company. The Company failed to
provide the Notice of Availability of the Department of Insurance on the
delay letter for 16 claims as required by 50 Ill. Adm. Code 919.70(a)(2)
and 919.40.
• Criticism 4 was issued to the Company. The Company failed to notify
the insured’s beneficiary with a reasonable written explanation for the de-
lay beyond 45 days for five (5) claims as required by 50 Ill. Adm. Code
919.70(a)(2).
• The median for payment was four (4) days.
m. Paid Group Annuity
• A review of 76 paid individual annuity claims produced three (3) criti-
cisms. Criticism 10 was issued to the Company. The Company failed to
provide the Notice of Availability of the Department of Insurance on the
delay letter for four (4) claims as required by 50 Ill. Adm. Code
919.70(a)(2) and 919.40.
• Criticism 12 was issued to the Company. The Company failed to notify
the insured’s beneficiary with a reasonable written explanation for the de-
lay beyond 45 days for one (1) claim as required by 50 Ill. Adm. Code
919.70(a)(2).
• Criticism 16 was issued to the Company. The Company failed to affirm
or deny claims within a reasonable time after proof of loss statements had
been completed for one (1) claim as required by 215 ILCS 5/154.6(i). In
addition, the company failed to offer payment within 30 days for one (1)
claim as required by 50 Ill. Adm. Code 919.50(a).
• The median for payment was 4 days.
n. Retained Asset Account Balances
• A review of 54 retained asset account balance files produced no criti-
cisms.
o. Retained Asset Account Activity
• A review of 26 retained asset account activity files produced no criticisms.
B. New Business
19
• The examiners reviewed the Company’s new business issued, declination
and withdrawn practices to determine its compliance with Illinois laws
and regulations.
a. Individual Life Issued
• A review of 115 paid individual life policies issued produced no criti-
cisms.
b. Individual Life Replacements Issued
• A review of 83 individual life replacement policies issued produced two
(2) criticisms. Criticism 28 was issued to the Company. The Company
failed to send the Notice Regarding Proposed Replacement of Life Insur-
ance or Annuity Form (Exhibit B) to the existing insurer within 3 working
days after receipt of the application for 55 applications as required by 50
Ill. Adm. Code 917.70(b)(c).
• Criticism 29 was issued to the Company. The Company failed to require
from the producer the Notice Regarding Proposed Replacement of Life
Insurance or Annuity Form (Exhibit B) for eight (8) applications as re-
quired by 50 Ill. Adm. Code 917.70(b).
c. Individual Life Declined Applications
• A review of 113 individual life declined applications produced one (1)
criticism. Criticism 23 was issued to the Company. The Company failed
to provide applicant, policyholder or individual proposed for coverage
with the specific reason for the adverse underwriting decision in writing
for one (1) application as required by 215 ILCS 5/1011(A)(1)(2).
d. Individual Life Not Taken/Withdrawn Applications
• A review of 86 individual life not taken/withdrawn applications pro-
duced no criticisms.
e. Individual Annuity Issued
• A review of 79 individual annuity contracts issued produced one (1) crit-
icism. Criticism 26 was issued to the Company. The Company failed to
establish a supervision system that is reasonably designed to achieve the
insurer’s and its insurance producers’ compliance with required training.
The Company is criticized under 50 Ill. Adm. Code 3120.50(f)(1)(B)
which states that the insurer shall establish standards for insurance pro-
ducer product training and shall maintain reasonable procedures to require
its producers to comply with the requirements of 50 Ill. Adm. Code
3120.60(c)(1) which requires insurance producers who engage in the sale
of annuity products to complete a one-time four-hour credit training
course approved by the Department. There were two (2) producers that
failed to complete the required training.
f. Individual Annuity Replacements
• A review of 13 individual annuity replacement applications produced no
criticisms.
g. Individual Annuity Withdrawn Applications
• A review of two (2) individual annuity withdrawn applications produced
no criticisms.
C. Producer Licensing
20
a. A review of 293 first year commission transactions and the associated producer
licensing produced no criticisms.
b. A review of 86 terminated agents produced no criticisms.
c. A review of 1 terminated agent for cause produced one (1) criticism. Criticism 5
was issued to the Company. The Company failed to provide notice of termination
to the Director of the Illinois Department of Insurance as required by 215 ILCS
5/500-85(a).
D. Policy Services
a. Individual Life Policy Loan Transactions
• A review of 86 individual life policy loan transactions produced one (1)
criticism. Criticism 25 was issued to the Company. The Company failed
to provide the Automatic Premium Loan (APL) benefit on a positive elec-
tion basis for two (2) of six (6) sample files as required by 50 Ill. Adm.
Code 1405.30(c) and failure to follow policyholder direction for APL ben-
efit election as required by 50 Ill. Adm. Code 1405.40(c)(1).
b. Group Life Policy Loan Transactions
• A review of 79 group life policy loan transactions produced no criticisms.
c. Non-Forfeiture Options Individual Life
• A review of 113 non-forfeiture options individual life transactions pro-
duced one (1) criticism. Criticism 22 was issued to the Company. The
Company failed to provide a list of all available non-forfeiture options
that the policy owner may elect per the policy for seven (7) policies as
required by 215 ILCS 5/234.1.
d. Non-Forfeiture Options Group Life
• A review of 14 non-forfeiture options group life transactions produced
one (1) criticism. Criticism 21 was issued to the Company. The Company
failed to provide a list of all available non-forfeiture options that the pol-
icy owner may elect per the policy for 13 policies as required by 215 ILCS
5/234.1.
e. Individual Life Cash Surrender
• A review of 114 individual life cash surrender files produced no criti-
cisms.
• The median for surrender was eight (8) days
f. Group Life Cash Surrender
• A review of 75 group life cash surrender files produced no criticisms.
• The median for surrender was 12 days.
g. Individual Annuity Cash Surrender
• A review of 114 individual annuity cash surrender files produced no crit-
icisms.
• The median for surrender was two (2) days
h. Group Annuity Cash Surrender
• A review of 46 group life cash surrender files produced no criticisms.
• The median for surrender was five (5) days.
i. Long-Term Care Reinstatements
• A review of one (1) long-term care reinstatement file produced no criti-
cisms.
21
j. Long-Term Care Reduce Coverage/Premium
• A review of 27 long-term care reduction of coverage or reduction in pre-
mium files produced no criticisms.
k. Long-Term Care Terminations/Lapses
• A review of 113 long-term care termination or lapse files produced no
criticisms.
E. Complaints and Litigation
a. Consumer Complaints
• A review of 245 consumer complaints produced no criticisms.
b. Department of Insurance Complaints
• A review of 154 Illinois Department of Insurance complaints produced
two (2) criticisms. Criticism 1 was issued to the Company. The Company
failed to respond to the Illinois Department of Insurance by the time al-
lotted by the department for four (4) life and annuity complaints as re-
quired by 50 Ill. Adm. Code 926.40. Criticism 27 was issued to the Com-
pany. The Company failed to respond to the Illinois Department of Insur-
ance by the time allotted by the department for two (2) long-term care
complaints as required by 50 Ill. Adm. Code 926.40.
c. Closed Litigation
• A company-wide review of seven (7) closed litigation files produced no
criticisms.
IN THE MATTER OF:
TRANSAMERICA LIFE INSURANCE COMPANY
6400 C STREET SW
CEDAR RAPIDS, IA 52499
STIPULATION AND CONSENT ORDER
WHEREAS, the Director of the Illinois Department of Insurance (“Department”) is a duly
authorized and appointed official of the State of Illinois, having authority and responsibility for the
enforcement of the insurance laws of this State; and
WHEREAS, Transamerica Life Insurance Company, (“the Company”), NAIC 86231, is authorized
under the insurance laws of this State and by the Director to engage in the business of soliciting, selling and
issuing insurance policies; and
WHEREAS, a Market Conduct Examination of the Company was conducted by a duly qualified
examiner of the Department pursuant to Sections 132, 401, 402, 403, and 425 of the Illinois Insurance Code
(215 ILCS 5/132, 5/401, 5/402, 5/403, and 5/425); and
WHEREAS, as a result of the Market Conduct Examination, the Department examiner filed a
Market Conduct Examination Report covering the examination period of April 1, 2019 through September
30, 2021, which is an official document of the Department; and
WHEREAS, the Market Conduct Examination Report cited various areas in which the Company
was not in compliance with the Illinois Insurance Code (215 ILCS 5/1 et seq.) and Department Regulations
(50 Ill. Adm. Code 101 et seq.); and
WHEREAS, nothing herein contained, nor any action taken by the Company in connection with this
Stipulation and Consent Order, shall constitute, or be construed as, an admission of fault, liability or
wrongdoing of any kind whatsoever by the Company; and
WHEREAS, the Company is aware of and understands their various rights in connection with the
examination and report, including the right to counsel, notice, hearing and appeal under Sections 132, 401,
402, 407, and 407.2 of the Illinois Insurance Code and 50 Ill. Adm. Code 2402; and
WHEREAS, the Company understands and agrees that by entering into this Stipulation and Consent
Order, they waive any and all rights to notice and hearing; and
2
WHEREAS, the Company and the Director, for the purpose of resolving all matters raised by the
report and in order to avoid any further administrative action, hereby enter into this Stipulation and Consent
Order.
NOW, THEREFORE, IT IS AGREED by and between the Company and the Director as follows:
1. The Market Conduct Examination indicated various areas in which the Company was not in
compliance with provisions of the Illinois Insurance Code and Department Regulations; and
2. The Director and the Company consent to this Order requiring the Company to take certain actions
to come into compliance with provisions of the Illinois Insurance Code and Department Regulations.
THEREFORE, IT IS HEREBY ORDERED by the undersigned Director that the Company shall:
1. Institute and maintain policies and procedures whereby the Company shall provide Notice of
Availability of the Department of Insurance on delay letter. 50 Illinois Admin Code 919.70(a)(2)
2. Institute and maintain policies and procedures whereby the Company shall provide notice of
termination to the Director of Illinois Department of Insurance. 215 ILCS 5/500-85(a)
3. Institute and maintain policies and procedures whereby the Company shall notify beneficiary at
time of claim of statutory interest provision. 215 ILCS 5/224(1)(l)
4. Institute and maintain policies and procedures whereby the Company shall provide Notice of
Availability of the Department of Insurance on denial letter. 50 Illinois Admin Code 919.50(a)(1)
5. Institute and maintain policies and procedures whereby the Company shall provide a list of all
available non-forfeiture options. 215 ILCS 5/234.1
6. Institute and maintain policies and procedures whereby the Company shall send the Notice
Regarding Proposed Replacement of Life Insurance or Annuity Form to existing insurer within 3
working days. 50 Illinois Admin Code 917.70(b)(c)
7. Institute and maintain policies and procedures whereby the Company shall require from producer,
the Notice Regarding Proposed Replacement of Life Insurance or Annuity Form (Exhibit B).
50 Illinois Admin Code 917.70(b)
8. Institute and maintain policies and procedures whereby the Company shall adopt and implement
reasonable standards for the prompt investigation and settlement of claims arising under its
policies. 215 ILCS 5/154.6(c)
9. Submit to the Director of Insurance, State of Illinois, proof of compliance with or remediation plan
for compliance with the above eight (8) orders within thirty (30) days of execution of this Order.
10. Pay to the D
irector of Insurance, State of Illinois, a civil forfeiture in the amount of $95,000.
00
to
be paid within ten (10) days of execution of this Order.
04/27/2023