The insurance company!
"Kentucky bans insurers from holding beneficiaries’ cash" by Bloomberg | August 16, 2010
NEW YORK — Kentucky’s insurance regulator has prohibited life insurers in the state from automatically retaining death benefits in their corporate general funds and issuing what they call “checkbooks’’ to the survivors.
“We believe in consumers having choices,’’ said Kentucky Insurance Commissioner Sharon Clark in an interview at the National Association of Insurance Commissioners meeting in Seattle Saturday. “We’re trying to be as proactive as we can.’’
Regulators are under pressure to change industry practices after Bloomberg Markets magazine reported in July that carriers profit by holding and investing $28 billion owed to beneficiaries. Retained-asset accounts allow insurers to keep the proceeds of a life insurance policy in their general corporate accounts, earning investment income, while providing the beneficiary with a checkbook account that is not insured by the Federal Deposit Insurance Corp.
Clark issued the advisory opinion in Kentucky Friday. Under it, insurance companies are also required to provide a new contract with complete disclosure on retained-asset accounts. Unless beneficiaries agree to that contract, payment must be made by check, rather than by setting up a retained-asset account, she said.
Clark said her office will consider it an “unfair claims settlement practice’’ for an insurer to place life insurance proceeds in a retained-asset account without a beneficiary’s consent. Such accounts were found to be a common practice among insurers.--more--"
"Insurers defend death benefit accounts" by Bloomberg News | August 16, 2010
LOS ANGELES — A trade group representing life insurers will tell state regulators that beneficiaries are helped when death benefits are retained in corporate accounts.
The accounts “allow grieving beneficiaries to make financial decisions at the time they choose to make them, while providing interest income that compares favorably with many other on-demand deposits’’ said Paul Graham, senior vice president for the American Council of Life Insurers.
Yeah, for the INSURANCE COMPANY!
The accounts are reliable, and checkbooks issued to beneficiaries provide access to cash as quickly as bank checks, he said in remarks to the National Association of Insurance Commissioners in Seattle yesterday.
Regulators are under pressure to change industry practices after Bloomberg Markets reported last month that carriers profit by holding and investing $28 billion owed to beneficiaries. The association has assigned a group of regulators to review the practice.--more--"
Also see: Wall Street Back the Way It Was
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