The state of California’s insurance regulator is aiming to suspend or revoke the insurance licenses from Wells Fargo due to illicit sales practices with an online referral program.
According to a report in CNBC, the state regulator contends that around 1,500 unauthorized policies were opened for California customers without them knowing about it. The sales were for renters’ insurance and term life policies that are offered by four insurance firms via the referral program.
In a statement to CNBC, Wells Fargo said “as we previously announced, Wells Fargo suspended online referrals of renters and simplified term life insurance products in December 2016 and initiated an internal review of those products. We have been cooperating with the CA Department of Insurance (DOI) over the course of this year.”
According to the report, the regulator said the unauthorized sales happened from 2008 through 2016. “We are sorry for any harm this caused our customers, and we are making things right for them as part of an ongoing remediation,” the embattled banks told CNBC.
The potential move by the California insurance regulator is just the latest in a string of Wells Fargo’s problems after its fake account scandal last year. Late last month, The Wall Street Journal reported the Office of the Comptroller of the Currency (OCC) warned Wells Fargo in a scathing letter that it is considering lodging formal enforcement actions against the bank for harming customers in its auto insurance and mortgage businesses. The OCC gave the bank until Nov. 24 to respond.
The regulator contends Wells Fargo failed multiple times to fix the problems with its auto insurance and mortgage lending units, as well as its other business lines. While Wells Fargo wouldn’t comment on the letter, it did tell the paper there is “still work to be done” and that the bank is “dedicated to making things right, fixing the problems and building a better bank.” Wells Fargo said it is making changes across its line of businesses to rebuild the trust of its customers and employees.
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