Wednesday, September 15, 2010


Cindy Lohman’s son, Ryan, a 24-year-old Army sergeant, was killed by a bomb in Afghanistan.

Get this - the Government insurance plan: they recruit you, train you, insure you, ship you around the world and when you get your head blown off, then they get that last inch of blood out of the stone by profiteering off of the blood money:

Veterans Agency Made Secret Deal Over Benefits

The U.S. Department of Veterans Affairs failed to inform 6 million soldiers and their families of an agreement enabling Prudential Financial Inc. to withhold lump-sum payments of life insurance benefits for survivors of fallen service members, according to records made public through a Freedom of Information request.

Since 1999, Prudential has used so-called retained-asset accounts, which allow the company to withhold lump-sum payments due to survivors and earn investment income on the money for itself.

OOOPS! Oh H-E-E-E-Y-Y-Y-!-!-! We're SORRY . . . we conveniently FORGOT TO TELL YOU we're making millions in interest and investments off the money that belongs to your survivors!

“It’s very clear they violated the original terms of the contract,” says Bridgeland, who is retained by the National Association of Insurance Commissioners
to represent consumers.

“Every veteran I’ve spoken with is appalled at the brazen war profiteering by Prudential,” says Paul Sullivan, who served in the 1991 Gulf War as an Army cavalry scout and is now executive director of
Veterans for Common Sense.

The U.S. Government mothballs ships and tanks, assorted small arms weaponry, equipment, even rucksacks and web gear, for cannibalization or sale to foreign militaries. Now we see an ghoulish angle of this kind of pragmatism:

Fallen Soldiers' Families Denied Cash as Insurers Profit

The “checkbook” system cheats the families of those who die, says Jeffrey Stempel, an insurance law professor at the William S. Boyd School of Law at the University of Nevada, Las Vegas, who wrote ‘Stempel on Insurance Contracts’ (Aspen Publishers, 2009).

A sample "check" for a Prudential retained asset account. Photographer: David Evans/Bloomberg

‘Bad Faith’

“It’s institutionalized bad faith,” he says. “In my view, this is a scheme to defraud by inducing the policyholder’s beneficiary to let the life insurance company retain assets they’re not entitled to. It’s turning death claims into a profit center.”

This thing stinks. This is absolutely disgraceful. In my view, this is only a few steps away from what the Nazis did: harvesting gold teeth, eyeglasses, wristwatches, jewelry, furs, clothing and shoes from gassed concentration camp inmates - their own citizenry.

What's even more mind-boggling is how on Earth are they going to sort this thing out? Think about it; there's the profits themselves to be divvy'd and distributed to fallen soldier's families. Then there's the amounts that insurance company executives and managers realized in bonuses, and then there's dividends to the stockholders; a significant percentage of these payouts should rightfully go to the survivors. But how to possibly calculate these amounts?

Anybody out there still think the Government is going to TAKE CARE OF YOU? Hmmm? HHHMMMMMMMMM ? ? ?

"If you expect the Government to take care of you, you're gonna get what the American Indian got." - Sergeant Major Loclomancil, US Army Special Forces and full-blooded Payute.



  1. I'm not seeing the issue.

    They sent her a letter saying the money was there, and as with all retained asset accounts (which are pretty much standard, as the linked account says, for all life insurance these days) she could have cashed it all out instantly if she'd wanted to.

    She decided to sit on it for six months ... and now she's complaining that they made a profit off of the money she left sitting there.

    (And according, again, the the article, the accounts are earning interest... for the recipient, not just for the company.)

    I'm not seeing the justification of the outrage here.

    But boy, is Mr. Evans angry about it. He's going to a lot of trouble to say that "maybe" there's a crime somewhere, and hey, these aren't FDIC insured deposits (well, of course not - insurance payouts aren't, even if the company's holding them for you and paying interest).

    There's no "there" there. The recipients are told, honestly, that they can cash out the entire policy immediately. That's not false, right?

    If they choose not to, the entire complaint appears to be that it's not really a bank account, despite having something that looks like checks, and the interest rates are "low" (despite them being a minimum of .5%; my CU checking account earns .15%, less than a third as much!)...

    Nope, still not seeing anything to be outraged about.

  2. You must be either a lawyer or an insurance guy.

    The deal is that when a soldier dies, the family gets paid. Point, blank and simple. Nowhere in the SGLI paperwork does it explain how Prudential gets to keep their hands on the survivor's payoff money in an uninsured account, and make interest + profit off of it. That's not part of the deal.

    If you clicked on all the links, you will see how insurance executives, commissioners and other experts all agree that this is at best a legal gray area, at worst a criminal liability.

    If it wasn't a big deal, the VA and the government wouldn't be sweating bullets over it, and Prudential wouldn't be doing cheetah flips right now to legalize the whole thing.

    Then to add insult to injury, when that poor woman at the top of the article went to use those "checks" they were not accepted.