Gerry Goldsholle has come up with a draft of a “bill of rights for retained asset accountholders.”
A retained asset account (RAA) is a vehicle for putting life insurance benefits in something that looks like a checking account rather than paying benefits out in the form of a lump sum.
Critics say RAAs often pay lower interest rates than bank accounts and are not insured by the Federal Deposit Insurance Corp. (FDIC).
Supporters say RAAs pay rates comparable to the rates provided by other safe, highly liquid accounts, are backed by state insurance guaranty funds, and give grieving beneficiaries the ability to put off making complicated financial decisions until they are in a better frame of mind.
Goldsholle, who says he invented the RAA concept in 1983, when he was an executive at a unit of MetLife Inc., New York (NYSE:MET), says the 120 life insurers that use RAAs ought to agree to an RAA holder bill of rights.