NEW YORK (CNN/Money) - The U.S. Securities and Exchange Commission said Monday it settled with two insurance companies on charges of allowing market timing in mutual funds through the sale of variable annuities, which are typically used as people near retirement.

The SEC said Conseco Inc. and Inviva Inc. have agreed to pay $20 million in disgorgements and penalties as part of the securities fraud settlement. The firms have also agreed to a cease and desist order, according to the SEC.

"It is particularly troubling when variable annuities, which are designed for and sold to retail investors to save for retirement and purchase life insurance, are affirmatively marketed to professional market timers," said Mark Schonfeld, director of the SEC's Northeast office.

Investors typically purchase variable annuities, which are combined securities and insurance products, for the products' income and tax benefits.

However, the SEC claimed the companies sold particular variable annuity products to hedge funds and other entities that then market timed mutual funds portfolios offered through the annuities.

"Through their frequent trading, the market timers diluted the value of the underlying mutual funds that were timed, and caused the funds to incur additional costs," the SEC said in a statement.

The Commission has brought a series of charges against several mutual fund firms that allowed investors to market time and purchase the securities after trading on respective markets had closed.