By Jake Zamansky:
Insurance regulators in New York earlier this week beat up the global insurance giant AXA SA (OTCQX:AXAHY) pretty good due to shoddy communication with clients about changes the company made to its AXA variable annuity contracts.
The $20 million fine against the U.S. arm of the French insurer is the state's largest penalty against an insurance company. That alone tells you the seriousness of AXA's variable annuity shortcomings.
AXA failed to adequately report changes in certain retirement income contracts, according to Leslie Scism of The Wall Street Journal. And those changes were clearly to the detriment of the investor.
"The New York State Department of Financial Services, in a consent order with AXA Equitable Life Insurance Co., argued that changes in variable annuities limited customers' investment return without providing adequate notice to the state," according to Scism.
In other words, AXA made these changes to variable annuity contracts without
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