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Bailout recipient defends Maui trip


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POSTED: Saturday, June 20, 2009

Lincoln National Corp. flew top insurance agents and company executives to a Maui resort the week before accepting almost $1 billion in U.S. bailout funds, two people with knowledge of the trip said.

An event schedule and other materials given to agents who went on the trip to Grand Wailea resort were printed on the letterhead of ITAGroup, the firm that calls itself “;a full-service performance improvement company”; on its Web site. The hotel advertises rates from $369 a night.

Financial firms have roused public ire by funding conferences and bonuses after posting record losses and tapping Treasury's Troubled Asset Relief Program to stay afloat. Congress has passed pay curbs and the government has demanded budget cuts, including the cancellation of a private-jet purchase at Citigroup Inc.

“;Lincoln is committed to providing continuing education events and rewards”; for agents, Laurel O'Brien, a spokeswoman for the Philadelphia-based insurer, said in an e-mail yesterday. The event in Hawaii allowed Lincoln to fulfill its “;obligation to our top distribution partners.”;

She said the event was for independent contractors, not company employees.

The insurer, which has been unprofitable for two straight quarters, held a pair of four-night trips from June 6 to June 14, each attended by more than 100 salespeople, the two people said.

The second conference ended the day before Lincoln announced it would take about $950 million in U.S. funds.

Grand Wailea generally doesn't comment on clients, said Christina Yumul, a spokeswoman for the hotel.

Insurance policies in the U.S. are often sold by independent agents who help customers choose among products from different carriers. Trips are used by many insurers as an incentive to salespeople.

Conferences “;have a value that goes beyond just compensation,”; Steven Schwartz, an analyst with Raymond James Financial Inc., said in an interview. Agents “;are motivated to sell in part due to the public nature of the awards system.”;

Insurers have reported losses and profit drops over the last 12 months as the financial crisis has pushed down the value of investments backing policies.

American International Group Inc., the insurer saved by four bailouts since September, said last year it would cancel most planned meetings, and Amsterdam-based ING Groep NV, which received a capital injection from the Dutch government, eliminated some conferences at its U.S. business.

Lincoln offers getaways annually as a reward for top sellers, the two people said.

This year's gathering scaled back on recreation activities, entertainment and meals, they said.

Lincoln broke with tradition this year by not issuing badges with the company's name and not printing agendas on its own letterhead, the people said.