Athene Life Insurance Co. of New York was fined $15 million by state regulators Thursday after an examination by the agency found the company violated the state's insurance laws and regulations by failing to make required disclosures to their policyholders. The agreement also involves First Allmerica Financial Life Insurance Co., a subsidiary of Global Atlantic Financial Group, which agreed to make remedial efforts costing about $40 million. The state Department of Financial Services found the companies withheld information from about 15,000 policyholders from 2015 to 2017. Those violations happened after Athene ceded almost all of its life insurance business to FAFLIC through a series of reinsurance agreements in 2013. Athene still owned the policies, but FAFLIC was responsible for managing them. Policyholders started to complain to the DFS about their policies at that point, which prompted the agency to conduct an examination of the companies over two years starting in 2015. The DFS found Athene had violated several parts of the state's insurance law by failing to communicate with its policyholders during that time. According to the agreement with the DFS, Athene failed to mail premium due notices to policyholders for an amount of about $81 million. It also failed to provide annual reports or cash surrender value notices to policyholders. The company also did not provide annual privacy notices to policyholders and did not send statements of a policy under which additional amounts were credited and marketed with an illustration, the agreement said. Athene will pay the $15 million fine, but FAFLIC will be responsible for remedial measures. The agreement requires FAFLIC to offer hardship waivers of back premium for policyholders who did not receive those premium notices. They also have to extend payments of back premiums for up to five years without interest. Policyholders will be allowed to have those back premiums deducted from any death benefits payable or other cash disbursements if they want. FAFLIC must also offer retroactive fixed interest credits and a five-year no-lapse guarantee to all eligible universal life and indexed universal life policyholders that pay back premiums. Maria Vullo, superintendent of the DFS, said in a statement that ceding business to FAFLIC did not leave Athene off the hook to follow state law. “Insurers who outsource their responsibilities to third parties are still responsible to meet all of their obligations under the law,” Vullo said. “Consumers must be able to trust that insurers are in compliance and are providing the required levels of service for life insurance policies. Given the increased frequency with which insurers use third-party providers, insurers will be held accountable for any failures to meet their legal obligations, even if that failure was the fault of a third-party provider.” Athene acknowledged the consent order in a press release Thursday. The company explained little beyond what the DFS found in its examination, but offered a commitment to correct the issues. “Athene has a strong commitment and track record of providing high quality service to its policyholders and will continue to work with FAFLIC as the remediation matters are implemented,” Athene said in the release. FAFLIC took partial responsibility for the error in a statement, saying it will work to protect policyholders going forward. “Unfortunately, during this process we were unable to service many of the policies properly for a period of time. We have provided regular updates to NYDFS and have fully cooperated with the department throughout the examination. We are doing everything possible to ensure policy owners' interests are protected, and throughout this process policyholder benefits remained in force and we have paid claims,” Global Atlantic Financial Group, FAFLIC's parent company, said in a statement.