Policy Transfers
- "These policy transfers treat policyholders like commodities, trading them like baseball cards," Mr. Metzenbaum said in a statement.
- The acquiring companies are often "in such poor financial shape that they couldn't attract policyholders but had to buy them wholesale, without their consent."
- [Senator Howard Metzenbaum (D-OH)]
1994 0328 - NYT - Transfers By Insurers Under Fire, By Michael Quint - [link]
- (p10) - John Garamendi, California Insurance Commissioner:
- Another troublesome question is whether the U.S. Labor Department's Pension Benefit Guaranty Corporation is liable for possibly millions of dollars due to beneficiaries of terminated pension plans. Why terminated? So that the plan's sponsors, that is the employers, could use the plan's excess funds, for whatever reason, by converting the plan's obligations into insurance annuities.
- The tragedy is that, while the direct pension obligations were guaranteed by the Federal Government, the insurance annuities, according to the PBGC, are not.
- Moreover, this transfer was usually done without the pensioners' knowledge, and certainly without their consent and, in at least one case, over their objections.
- Another troublesome question is whether the U.S. Labor Department's Pension Benefit Guaranty Corporation is liable for possibly millions of dollars due to beneficiaries of terminated pension plans. Why terminated? So that the plan's sponsors, that is the employers, could use the plan's excess funds, for whatever reason, by converting the plan's obligations into insurance annuities.
Executive Life Insurance Failure, Charles B. Rangel (D-NY) --- [BonkNote]