Jefferson City, Mo. - State regulators have reached a settlement with one of the nation's most high-profile insurance companies. Under the agreement, American Family Life Assurance Company of Columbus - best known as Aflac - has paid a $700,000 fine, which goes to the State School Fund.

Insurance departments in Missouri, Minnesota and Idaho launched an extensive market conduct examination of numerous Aflac business practices. Areas of review included:

• Suitability and overselling;
• Sales of duplicate coverage;
• Sales that are a replacement of existing coverage;
• Policies containing waiting periods;
• Advertising created by agents; and
• Incentives, contests, prizes and awards given to agents selling Aflac policies.

In addition to Missouri's fine, Aflac pays $700,000 in fines to Minnesota and $200,000 to Idaho. Aflac will also submit a plan to correct certain business practices. Its compliance with the plan will be closely monitored by regulators in all three states for three years.

Besides the market conduct exam, the Missouri Department of Insurance recently assessed fines against three Aflac insurance agents for violations of state law, including falsifying information on consumers' insurance applications and creating bogus policies. Including these three, all insurance agents disciplined by the department in 2012 have paid more than $26,000 in fines.

Missouri Insurance Director John M. Huff says Aflac specializes in supplemental insurance policies, which can cover short-term or long-term disabilities, certain diseases, accidental injuries and other risks. Huff says this type of insurance can sometimes be misunderstood by consumers.

"Supplemental policies should never be seen as a substitute for comprehensive insurance, such as a major medical health plan," Huff said. "As with any type of insurance, we encourage Missouri consumers to be fully informed about these products, so they can determine whether they meet their needs."

In market conduct exams and investigations, the department reviews insurance company practices regarding the treatment of policyholders. This includes the way premium rates are charged, the way insurers handle claims and other responsibilities under state law. These reviews can result in refunds for consumers, fines and corrections in business practices, as well as other remedies.

Since the beginning of 2009, market conduct enforcement actions have generated $8.7 million in payments from insurance companies. The money goes toward refunds for consumers, general revenue and the Missouri State School Fund.

Consumers with questions or complaints about supplemental insurance or any other type can call the Insurance Consumer Hotline at 800-726-7390 or visit insurance.mo.gov.