December 4, 2006
UNIVERSITY OF ILLINOIS
FB.07.01 Resolution II Regarding AIG Sun America: Safeguarding the Interests of Employees and Retirees of the State of Illinois/University of Illinois
In 1999, Sun America (currently AIG Sun America) finalized its assumption of Mutual Benefit Life retirement accounts from the State of Illinois/University of Illinois. While other universities and state agencies appear to be involved, the number of University of Illinois accounts was reportedly 1,038.
AIG Sun America has provided annuity calculations which do not appear to comply with average standard calculations by industry leaders. For two affected accounts, the calculations appear to be 30% below industry averages.
The State of Illinois/University of Illinois needs to have in place and communicate expeditious and efficient remedies safeguarding the rights of employees, beneficiaries, and retirees.
Whereas, On May 15, 2006 the President of AIG Sun America Retirement Markets Inc. wrote directly to the Director of Benefits/Compensation, University of Illinois requesting “the opportunity to address any additional questions” in response to Senate Resolution FB.06.02 of April 24, 2006; and
Whereas, The President of AIG Sun America Retirement Markets Inc. was sent a September 22, 2006 bipartisan letter from five Illinois State Legislators stating that AIG Sun America’s “communiqués to the University of Illinois Faculty Benefits Committee have been insufficient, generally nonresponsive, and unconvincing. We are extremely concerned about the treatment of these employees and that these concerns may be merely indicia of more widespread concerns. … [W]e stand ready to pursue other avenues should a mutually agreeable resolution not be forthcoming.”; and
Whereas, Thereafter, on October 27, 2006, the President of AIG Sun America Retirement Markets Inc. wrote to the Senate Faculty Benefits Committee declining to appear before the Committee for any of the three proposed meeting dates to provide general non-proprietary information, as well as declining to provide answers to non-proprietary informational requests, about such items as the company’s “MarketLock” program, as requested in the October 3, 2006 letter from the Committee;
Be it resolved by the UIUC Senate that
The UIUC Senate appreciates the September 22, 2006 letter by five Illinois State Legislators sent to the President of AIG Sun America Retirement Markets Inc.
The UIUC Senate advises any State of Illinois/University of Illinois employees, beneficiaries, or retirees who have concerns involving calculations or marketing practices of any insurance company that (1) they may directly contact the Illinois Division of Insurance at www.ins.state.il.us which has a simple one-page complaint form; and (2) regulations of the Illinois Division of Insurance do not allow an insurance company to retaliate against parties filing a complaint.
Senate Committee on Faculty Benefits
Barclay Jones, Chair
H. F. Williamson
Kenneth Andersen, Ex officio
James Davito, Ex officio
Michael Grossman, Ex officio
Terry Jobin, Observer
Judy Rathgeber, Ex officio (designee)
Deb Stone, Ex officio (designee)