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Investing.com -- Globe Life Inc. (NYSE:GL) stock surged 6.6% today after the U.S. Attorney’s Office for the Western District of Pennsylvania notified the company it has closed its investigation into sales practices at American Income Life (AIL), a Globe Life subsidiary.
The investigation, which had involved subpoenas seeking documents related to sales practices by certain independent sales agents contracted to sell AIL policies, concluded without any enforcement action against Globe Life or AIL. This resolution removes a significant regulatory uncertainty that had been weighing on the company’s shares.
TD Cowen analyst Andrew Kligerman reiterated a Buy rating and $182.00 price target on Globe Life. The analyst commented, "With both investigations now resolved, we expect the valuation overhang to abate, and see strong momentum on a number of fronts."
The conclusion of this investigation follows an earlier regulatory inquiry that had also been resolved, potentially clearing the path for Globe Life to focus on its core insurance business operations without the distraction and uncertainty of pending government investigations.
Investors responded positively to the news, viewing the closure of the investigation as removing a key risk factor for the company’s future performance and valuation.
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