Tuesday, July 9, 2013
complex scams involving life insurance policies
There are a lot of complex scams involving life insurance policies. What looks like a good idea on paper may leave you with fewer assets and less protection, while lining the pockets of salesmen and insurance brokers. Many people are convinced to sell their current life insurance policy in order to pay the premium needed to "upgrade" their policy. All the money you have lost goes straight to the agent, while your new policy may even cost you more and protect you less.
If you believe that you have been the victim of life insurance sales fraud, we can help you evaluate your claim and explore your options. With considerable experience handling long-term disability and life insurance coverage claims, Lance Wallach wrote the book on insurance that others read for CPE credit.
Tuesday, July 2, 2013
National Association of Insurance Commissioners
Jim Donelon, the president of the National Association of Insurance Commissioners, questioned the need for a countrywide halt on approvals of captive insurance deals one day after New York’s regulator said the transactions hide risk.
“Frankly, at this point in time, I don’t see an obvious need for such a moratorium,” Donelon said today on a conference call held by the NAIC.
MetLife Inc. (MET) and Prudential Financial Inc. (PRU), the largest U.S. life insurers, are among companies that use subsidiaries known as captives to transfer risk and increase financial flexibility. Benjamin Lawsky, the superintendent of New York’s Department of Financial Services, said in a report yesterday that other states are allowing captives to use riskier collateral in a “regulatory race to the bottom.”
“The fact that certain insurers are inappropriately using shell games to hide risk and loosen reserve requirements is greatly troubling,” Lawsky said in the report. “Shadow insurance allows companies to divert reserves for other purposes besides paying policyholder claims.”
Donelon said NAIC members already have a group reviewing captives and that state regulators support improved transparency on the deals.
“We are doing what we need to do in a thoughtful, deliberative way,” Donelon said on the call. He said that the NAIC weighs standards rather than imposing regulations and that“one of those standards could be to implement what I consider a knee-jerk position of issuance of moratorium before the house is on fire.”
I do not agree with this.
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