Chickensnits: Are Insurers War Profiteers?

Get ready to chew gravel in the parking lot in a high fit of poultry pique: an investigation of several large national insurance corporations has been launched by NY Attorney General Andrew Cuomo for what, in my opinion, amounts to the most cynical sort of war profiteering I can imagine. Eight insurers are suspected of managing the insurance payouts to military widows in such a way that they continue to make a profit on benefits that belong to the deceased serviceman's family.

According to CNN,

The attorney general's office said it appears some insurers tell families of fallen military personnel that policy payouts will be placed in an interest-bearing account. But the bulk of the interest benefits the insurers, and the cash is not placed in banks insured by the Federal Deposit Insurance Corporation (FDIC), Cuomo's office said.

His office said insurers place cash in their corporate accounts, reportedly earning up to 4.8 percent interest while paying families as little as 0.5 percent interest.

 Eight insurance companies have been subpoenaed, including Prudential and MetLife. Prudential's practices are offered as an example of the way this scam feature works: the beneficiary receives what appears to be a checkbook from JP Morgan Chase to access their benefits; however, according to Cuomo's office,

"Instead, Prudential must send money to JPMorgan Chase before the checks can clear," the attorney general's office said. "Prudential beneficiaries are also not informed that, under a 2008 law, they have one year to place the death benefits in a Roth IRA and earn tax-free investment gains for the rest of their lives. Thus, real financial harm is suffered by Prudential's lack of disclosure."

 So, to break it down, they keep the death benefit and earn corporate interest on it, pay a lower interest rate to the beneficiary (who believes the money is earning a "competitive interest rate"), pocket the difference, and control the gate through which the money flows (possibly slowing that flow if it benefits the corporation?). Scummy. Slime. Bags.



Both the Veteran's Administration and Secretary of Defense Robert Gates' office are looking into the investigation. And, of course, Hen's Teeth is taking all this with a grain of gravel, since Cuomo is running for the governor's office in New York.