The chairman and chief financial officer of a New York-based life insurance carrier were removed from their roles amid allegations of financial improprieties and an investigation by the New York State Insurance Department.

Herbert Kurz, founder and chairman of Presidential Life Corp., was stripped of his title following a vote by the board of directors after irregularities were found in the 2007 tax returns of a charitable foundation run by the Kurz family, which sought to acquire a controlling interest in the firm.

Kurz, who remains on the board of Presidential Life and is also a stockholder, is an officer and director of the Kurz Family Foundation, which is a separate entity from Presidential. The foundation owns almost 21% of Presidential Life.

According to the Presidential board, it removed Kurz for possible self-dealing and using charitable assets of the foundation for personal expenses. The company says the irregularities were found as tax returns of the foundation were being examined as part of its application to the NYSID related to the acquisition.

“We do not comment on ongoing investigations,” Andrew N. Mais, director of public affairs for the New York State Insurance Department, told IFAwebnews.com.

In addition, the board removed Charles Snyder as CFO. Acting in a personal capacity, Snyder is alleged to have prepared and signed the foundation’s 2007 tax returns. According to the board, the NYSID has issued a subpoena to Snyder to testify about the foundation’s expenses.

In response, A.M. Best has placed the B+ financial strength rating of Presidential “under review with negative implications” citing lack of clarity of the firm’s future management structure.

Presidential appointed Dominic F. D’Adamo as acting CFO, to replace Snyder. D’Adamo was most recently senior vice president of finance at EmblemHealth Inc., and spent 27 years with Marsh Inc., where he was managing director and corporate controller.

In a statement, Presidential board member William M. Trust Jr. said the actions and removal of Kurz and Snyder do not involve the operations of Presidential Life and will have no impact on the carrier’s financial condition.

“The board of directors expects the highest standards from its directors and executives,” he stated, adding that the board “concluded these changes were in the best interests of safeguarding the integrity and values of Presidential Life.”

Presidential Life Corp., based in Nyack, N.Y., is the parent firm of Presidential Life Insurance Co., which sells life insurance and annuity products in 49 states and the District of Columbia.