House Panel OKs RAA Measure

Legislation similar to H.R. 5993 was introduced in the Senate just before the summer recess by Sen. Ben Cardin, D-Md. The Cardin bill is S. 3718, the Securing America’s Veterans Insurance Needs and Goals Act of 2010.

Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking, Housing and Urban Affairs Committee, has been asked to hold a hearing on the RAA before Congress departs in mid-October, but it is still unclear whether there will be time to do so, according to several industry lobbyists.

In related news, Birny Birnbaum, a consumer activist, has asked the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., to get more information from insurers about RAAs.

The current request for information “fails to ask for critical information necessary for any meaningful review of insurers’ use of retained asset accounts,” Birnbaum writes in a letter to the NAIC. “We do not see how regulators can evaluate how well RAAs are serving consumers without knowing how long these accounts are held and how many of the accounts are established and never fully used by the beneficiary. This information is essential for evaluating the claims made by defenders of RAA as a default option that consumers need some time to sort out the use of the policy benefits.”

Birnbaum says he would not expect consumers to use RAAs for more than a year or two if the defenders are correct. If accounts are held for longer periods, “that fact would be consistent with the concern that consumers do not fully understand the RAA and forget about or otherwise fail to use the benefits,” he says.