Since Bloomberg News broke the story on July 28 of deceased veterans’ families, and others, receiving not lump-sum payouts but “checkbooks,” drawn not on FDIC-insured bank accounts but on accounts held by the insurance companies, debate has raged. Depicted in the press as “institutionalized bad faith,” a “scheme to defraud,” and other incendiary terms, the practice of retained asset accounts (RAAs) has come under an attack as virulent as any the insurance industry may have faced in a very long time.
The industry is now playing catch-up, as evidenced in an NU Online News Service blog entry on Wednesday that advised insurance industry folks to take to the Web and defend the practice, which the blogger, Bill Coffin, says is “nothing new.”
RAAs may very well be nothing new in the industry, but they’re apparently not what bereaved families expect upon the death of a loved one, as a rule. And the public outcry is being followed by some action, at least: as reported in another NU Online News Service article on Wednesday, the House Veterans Affairs Committee has approved a proposal that could have an impact on these accounts.