The state Department of Insurance is seeking the action following alleged improper sales practices.
The California Department of Insurance has revealed that it is planning to either suspend or revoke the Wells Fargo insurance license in the state. It is pursuing this intention as a result of the company’s online insurance referral program and its allegedly improper sales practices.
The department conducted an investigation that revealed around 1,500 improper insurance sales.
In those cases, the online Wells Fargo insurance company was allegedly found to have sold about 1,500 policies and to have charged premiums on those policies to customers who had neither given their permission nor were they aware of the policy purchase in the first place, said a California Department of Insurance statement this week.
At the time of the writing of this article, Wells Fargo had not been immediately available for comment on this issue. The company is the third largest American lender when measured by assets.
Wells Fargo insurance has already announced its intentions to withdraw from the personal insurance business.
The insurance company’s current personal insurance business includes homeowners, renters, auto and umbrella products. In its announcement of its withdrawal from that market, it stated that it would immediately begin winding down its promotional and overall marketing activity for that business. It intends to fully exit the business at some point in the first quarter of next year.
This represents only the latest in a series of scandals wracking the company’s insurance business. Wells Fargo has been battling to recover from one scandal after another for over a year. This has impacted a number of its consumer businesses, particularly its various insurance products.
In 2016, the bank was required to pay $185 million to regulators following an investigation that discovered that Wells Fargo employees had been opening deposit and credit card accounts in the names of real customers without their knowledge. This year, it was discovered that auto loan customers were being sold car insurance they didn’t need, charging unnecessary premiums that led to many thousands of vehicle repossessions.
Wells Fargo insurance has already been existing a number of other markets such as crop coverage. Leaving the personal insurance business is only the next step in that plan.
