Thirty-nine states announced last week that American Bankers Insurance Group has agreed to pay them a combined $12 million for violations of insurance regulations.

In a consent order unveiled last Monday, the states accused the Miami credit insurance giant of a host of infractions, including failing to police the licensing of brokers that sell its products and using unapproved marketing and rate materials.

American Bankers Insurance executive vice president P. Bruce Camacho said the company denied all the charges but agreed to settle the matter to avoid disrupting business. "You don't fight regulators. ... You have to work with them," said Mr. Camacho, who heads investor relations.

Observers said the settlement, which came after a lengthy examination, highlighted the difficulties that insurance companies face in policing the activities and licensing of agents.

Bankers should take note because American Bankers Insurance is the largest provider of credit insurance to the industry, said Kenneth Kehrer, a Princeton, N.J., consultant. The company, which sells insurance for things like credit cards and home equity loans, wrote more than $600 million of premiums through banks last year.

Alessandro A. Iuppa, Maine's insurance superintendent, said: "We look upon any violation of the law as serious, but you really run into problems when it begins to look like a business practice."

The states, which joined forces for efficiency, said lapses at American Bankers Insurance included failing to comply with file-documentation and claims-denial procedures. The company agreed to be reexamined by a team of state insurance regulators and, if problems have not been corrected, to pay an additional $3 million.

The $12 million, and any additional amount, will be allocated based on American Bankers Insurance's premium sales volume in each of the 39 states.

The company has every intention of working with regulators to comply, Mr. Camacho said. It has already booked $15 million for the settlement because it is impossible to know what the states will do when they reexamine the company, he added.

Observers said the financial impact on the company will be negligible. Michael Albanese, a vice president at A.M. Best, which rates insurance companies, said American Bankers Insurance has strong earnings. What's more, it is flush with cash, having collected a $400 million breakup fee from Cendant Corp., which aborted a plan to buy the company.

Mr. Camacho described the state's complaints as technical legal interpretations. With 40 million policyholders and 21,000 forms, the number of complaints was minor, he said. "No company is without sin," he added.

As to the issue of using unapproved rate information, Mr. Camacho said, "In most cases where we deviated from rates, we've deviated downward."

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