In Practice January 6, 2022

Hub International Acquires Another Top 100 Advisory Shop

The acquisition of Raffa Financial Services, a recipient of PLANADVISER’s Top 100 recognition, by Hub International shows how leading retirement plan advisory shops will be targets for consolidation in 2022.

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Hub International revealed today its acquisition of Raffa Financial Services, a retirement plan-focused firm headquartered in Rockville, Maryland, that also has an insurance and employee benefit brokerage business.

The services Raffa provides include employee benefits, executive benefits, retirement plan advisory services, risk management, and individual financial and insurance planning. Joe Brown, president of Hub Mid-Atlantic in the Washington, D.C., metro area, says the onboarding of Raffa is a “great addition to Hub.”

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“Its stellar reputation, coupled with its market-leading employee benefits and retirement expertise, will strengthen our ability to serve our clients in the region,” he says.

Hub’s acquisition of Raffa is notable for the fact that Raffa’s retirement planning business has been recognized in the PLANADVISER Top 100 Retirement Plan Adviser awards program, in the small team category. It shows the way Hub’s acquisition targets tend to be financial services firms with well-established retirement plan divisions, as the firm’s leadership has emphasized in interviews with PLANADVISER. According to Hub leadership, the firm is aiming to enable greater growth for the advisers it is bringing on board by supplying them with back-office efficiencies and extensive referral networks via its insurance business, in addition to other client-facing resources.

With the acquisition, Steve Heger, president of Raffa Financial Services; Jon Zeisler, vice president of group benefits; and Eduardo Gimenez, vice president of retirement plan services, will join Hub Mid-Atlantic, alongside their staff.

“We are thrilled to welcome the Raffa Financial team to Hub,” says Joe DeNoyior, national president of Hub Retirement and Private Wealth. “Their focus on delivering complete solutions for their clients to become an employer of choice and getting employees retirement ready is a great fit for our team.”

Heger says his team looks forward to working to expand Hub’s employee benefits and retirement advisory capabilities and to provide clients with “a unique platform of products and services that distinguishes Hub.”

Compliance January 5, 2022

New York State Fines Pacific Life for PRT Violations

The company was penalized for violating state law by conducting an unlicensed insurance business.  

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The New York State Department of Financial Services (DFS) has assessed a $3 million penalty against Pacific Life Insurance Co. (PLIC) for conducting insurance business in New York without a license.

The penalty was ordered in connection with the company’s pension risk transfer (PRT) business. Pacific Life was served with a consent order from Acting New York State DFS Superintendent Adrienne Harris.  

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“This type of unlicensed insurance activity puts the hard-earned retirement dollars of New Yorkers at risk,” she said. “The department remains committed to safeguarding the retirement assets of New Yorkers and supporting the financial stability of individuals and families, which is even more critical today as we work to revive New York’s economy amid the ongoing pandemic.”  

New York state investigations into PLIC actions found that, in 2016 and 2019, the company bid on and won two large transactions with a New York-based sponsor, in violation of state insurance laws.

“The investigation concluded that PLIC had done insurance business in New York without a New York license in connection with its pension risk transfer business,” the consent order states. “PLIC PRT representatives had exchanged hundreds of email communications and other contacts with businesses (including some located in New York) and communicated with New York individuals in violation of the insurance law.”

This enforcement action is the third penalty from DFS against unlicensed insurance businesses that have solicited and engaged in violations connected to PRT businesses.   

In April 2020, New York state penalized Athene Holding Ltd. with a $45 million fine for New York insurance law violations in connection to subsidiary Athene Annuity & Life Co. and its PRT business. AIG was punished with $12 million in fines for violations related to its subsidiary, American General Life Insurance Co. (AGL), and that company’s PRT business early last year.

As part of the agreement with DFS, PLIC will transfer the handling of transactions to PLIC’s New York subsidiary, Pacific Life & Annuity Co.

New York state insurance law Section 1102 prohibits operating an insurance business unless it is appropriately licensed. 

“Certain acts in New York, effected by mail from outside New York or otherwise, by any person or entity, constitute doing an insurance business in New York,” the consent order states. “Such acts include making, or proposing to make, as insurer, any insurance contract, including either issuance or delivery of a policy or contract of insurance to a resident of New York or to any firm, association, or corporation authorized to do business in New York, or solicitation of applications for any such policies or contracts; in addition to collecting any premium, membership fee, assessment or other consideration for any policy or contract of insurance.”

PLIC says Pacific Life “has taken the necessary steps to resolve the issue with the DFS and has implemented necessary changes to ensure proper pension risk transfer business practices in New York moving forward.”

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