The National Conference of Insurance Legislators (NCOIL) has posted public comments it has received from a number of parties on the retained asset account issue.
NCOIL, Troy, N.Y., requested the comments in advance of a conference call it will hold Wednesday on a proposed consumer bill of rights governing retained asset accounts (RAAs).
RAAs are interest-bearing checking accounts that some insurers set up to dispense death benefit proceeds to policy beneficiaries. Among other obligations, the proposed Beneficiaries’ Bill of Rights on RAAs would require complete “disclosure, transparency, and accountability” by insurers about RAAs set up for beneficiaries.
Comments on the proposal, posted on NCOIL’s Web site, include a statement from the American Council of Life Insurers (ACLI), Washington, disagreeing with assertions by critics that RAAs are imposed on beneficiaries without clear disclosure of alternatives.
“These accounts provide a valuable service to policyholders and their beneficiaries and are the best settlement option available,” the ACLI said in a statement signed by John Gerni, ACLI’s regional vice president for state relations. RAAs “allow beneficiaries, who are still grieving, to take as much time as they need to decide what to do with, or how to deposit or invest, their death benefit proceeds.”
A comment from Assurant Inc., New York, argued that RAAs “have not be problematic for the users in the 20 or more years that such accounts have been in existence, and insurers have proven to be more financially stable than banks.”
The Center for Economic Justice, Austin, Tex., maintained that more consumer disclosures from insurers about RAAs would not necessarily help consumers.
“We have seen time and again how disclosures do not empower consumers, but provide a liability shield for businesses selling a product,” according to the center. It also argued that some beneficiaries “select the retained asset account settlement option without realizing they are doing so.”
Other comments were posted by representatives of MetLife Inc., the Center for Insurance Research, Cambridge, Mass., and insurance regulators from Connecticut, Louisiana, Pennsylvania, and Washington State.