Rabu, 07 September 2011

Appropriate Government Tricks

Back in the day, I looked forward to delivering death claim checks as much for my own closure as my clients'. It's not that I wished that any client would die, but that the package I was delivering would last far longer than the sponge cake or relish tray.

Alas, a number of years ago carriers decided checks were out, and checkbooks were in. That is, instead of sending a simple check to the agent to be personally delivered to the beneficiary, carriers started sending checkbooks linked to "benefits accounts;" these look like plain old checking accounts, but "unlike a bank account, this money isn't protected by the FDIC, nor is it even held in a separate, specific account. It's just considered part of the carrier's overall assets."

Now, The Golden State is considering legislation to change all that:

"Members of the California Senate have voted 36-0 to approve ... a bill that would require life insurers to get a written declaration stating how the beneficiary wants to receive the benefit payment ... Current California law gives life insurers the ability to pay benefits solely through [those fake checking accounts]."

Bravo!

Now it may seem draconian to put that choice on the back of a grieving widow (or widower), but there's a sort of built-in opt out provision:

"[I]f a consumer failed to make a decision, the bill would let an insurer set up an RAA."

I'd like to see other states go this route, as well.

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