Interest Rate - We Won't Have To Pay It
- 2005 1117 - GOV (Senate) - A Review of the GAO Report on the Sale of Financial Products to Military Personnel, Richard Shelby (R-AL) --- [BonkNote]
- (p21) - Paul SARBANES (D-MD). Is there not information from the companies, like internal memos and so forth, where they are relying in fact on these sales items not being carried through to get the benefit in the later years? It is all part of their calculation as to how to make a much larger profit out of what they are doing; is that not correct?
- GAO - Cody J. Goebel. Yes, Senator, in our report we quote from some of the internal memos that were obtained through depositions in a previous court case, where one of the company officials was attempting to overcome objections within his own company as how can their firm could sell this and promise this high rate of return that is not feasible. And he told them: ‘‘No, no, do not worry about it, we won’t really ever have to pay that amount out, 40 percent will drop out in the first year.’’ And so the products, the way they were structured and designed seemed almost deceptive to us.
- Chairman Richard Shelby (R-AL) - I personally believe that companies that are doing business this way, as you describe, exploiting our soldiers, should be banned or something. You know, I do not know exactly how we are going to do it, but we are going to look seriously, Senator Sarbanes and I working with Senator Enzi and others, Senator Allard, on legislation.
- (p21) - Paul SARBANES (D-MD). Is there not information from the companies, like internal memos and so forth, where they are relying in fact on these sales items not being carried through to get the benefit in the later years? It is all part of their calculation as to how to make a much larger profit out of what they are doing; is that not correct?
- (p174-175) - And even if interest should fall, in the distant future, below six percent, the premiums charged will undoubtedly enable the company to fulfil the contract with those few policyholders who continue, as the expenses upon these old policies being very small, the excess of margin over expenses will make up any possible deficiency.
1871-1, NAIC Proceedings, (fka National Insurance Convention) --- [BonkNote] --- 233p