Department of Financial Services (DFS) has fined AXA Equitable a $20m for violating Insurance Law related to variable annuity products.
The variable annuity products are investments that consumers pay for their retirements.
According to DFS investigation, AXA made changes to certain variable annuity products that limited the potential returns for existing customers without giving adequate notice.
Governor Andrew Cuomo said: "Insurers have a fundamental responsibility to be clear and upfront with their regulators, particularly when a company’s actions can impact the retirement savings of tens of thousands of New Yorkers.
"Unfortunately, AXA did not meet that basic test and today’s action should send a signal that failing to do so is simply unacceptable."
Since three years, AXA has filed requests with DFS and its predecessor agency to change and restate the Plans of Operation for certain variable annuity accounts to implement its AXA Tactical Manager strategy (ATM Strategy).
DFS added that the ATM Strategy has been designed to smooth funds’ returns during periods of high market volatility. AXA failed to explain in its filings to the Department that it was making such changes to its variable annuity products.
New York financial services superintendent, Benjamin Lawsky, added: "When it comes to retirement products, insurers must go above and beyond to explain any changes that would alter investor returns.
"Here, AXA changed the rules on these important products midstream and should have done more to disclose those changes to the Department. AXA has done the right thing in resolving this matter."