Thrivent fraud allegations and failed appeal, Thrivent fraternal benefit society status immunity?, Fraud must be addressed via dispute resolution? Apparently not
“You don’t need to be Christian to join our team.”…Thrivent job opening ad
“I worked at Thrivent Financial full-time (More than 8 years)” “Claims to be based on Christian values but does not adhere to them.”…Former Thrivent employee
“pre-dispute mandatory arbitration provisions are inappropriate in insurance policies and incompatible with the legal duties insurers owe policyholders when handling their claims.”…NAIC, National Association of Insurance Commissioners, August 15, 2016
Thrivent believes and maintains that they are not subject to the same insurance laws as other insurers.
That is generally true.
That does not mean that they are immune from all insurance laws or other statutes just because they are a fraternal benefit society.
Their contract states that even charges of fraud must go through their mandated MDRP, Member Dispute Resolution Program.
However, the courts have consistently held that fraud, even without proof, can negate mandated arbitration and allow a case to enter litigation.
Charges of fraud against Thrivent are not as rare as they would have you believe.
“Illinois Insurance Code did not bar Securities Department from investigating VA sales
The Illinois Securities Department had authority to investigate allegations that a broker-dealer committed fraud in the sale of variable annuities. The Illinois Securities Law authorizes the Securities Department to investigate whether registered broker-dealers and advisers have committed fraud in any business practice, even if that practice involves insurance products. Accordingly, the Illinois Court of Appeals affirmed dismissal of the broker-dealer’s complaint (Thrivent Investment Management Inc. v. Illinois Securities Department, August 28, 2018, Walker, C.). ”
From the Thrivent appeal.
¶ 1 Held: The Illinois Secretary of State Securities Department has authority to investigate allegations that a registered securities dealer committed fraud in the sale of variable annuities, even though the Department of Insurance has sole authority to regulate the issuance and sale of variable annuities. Oppressive discovery requests do not violate a respondent’s constitutional rights unless judicial discovery procedures will not adequately protect the respondent’s rights.”
“¶ 3 We hold (1) the Illinois Securities Law (Act) (815 ILCS 5/1 et seq. (West 2016)) gives the Securities Department authority to determine whether Thrivent, a registered securities dealer and investment adviser, committed fraud in any of its business practices; (2) the complaint does not allege facts showing judicial processes for discovery will violate Thrivent’s constitutional rights; and (3) the proposed amended complaint does not cure the defects of the dismissed complaint. Accordingly, we affirm the dismissal of the complaint
with prejudice and the denial of the motion for leave to amend.”
From Thrivent v. Perez.
“28. As a not-for-profit fraternal benefit society, Thrivent is a type of life insurer. It is organized and operating pursuant to Chapter 614 of the Wisconsin statutes, known as the Wisconsin Fraternal Code. The Wisconsin Fraternal Code is a part of the insurance laws of the State of Wisconsin. Section 614.05 of the Wisconsin Statutes specifies that fraternal benefit societies are subject to the requirements of the Fraternal Code, and they are exempt from other Wisconsin insurance laws, except to the extent those other insurance laws are specifically made applicable to fraternal benefit societies.”
“31. A fraternal benefit society’s principal regulator is the insurance regulator for the state of its domicile. Thrivent’s principal regulator is the Wisconsin Office of the Commissioner of Insurance (“Commissioner”). The Commissioner is empowered to conduct examinations of Thrivent under Wisconsin Statute Section 601.43 (as Section 614.05 specifies that Chapter 601 applies to fraternal benefit societies to the same extent as mutual insurers). Thrivent’s insurance marketing practices are subject to regulation under Chapter 628 of the Wisconsin statutes and Thrivent is subject to unfair and deceptive trade practices statutes to the same extent as other types of life insurers.”