Over the last few weeks, I have both weighed in on the retained asset account controversy in favor of the industry, but I have also thrown a few comments regarding the industry’s lackluster defense of itself. Late last week, Prudential sent this open letter to its military policyholders to explain its points regarding the use of retained asset accounts and to address the criticisms of RAAs themselves, namely that they victimize the policyholder. Check it out:
Prudential has noted to me repeatedly that a main reason why it has been so quiet on RAAs is because it wants to remain above the clamor that this issue has generated. On one hand, this is laudable: by refusing to stoop to mud-slinging, Prudential maintains its dignity and also does not dignify the charges made against it. (Which, incidentally, do not merit dignifying.) But as I mentioned earlier, the industry ignores its critics at its peril simply because negative perceptions slowly build up like barnacles on the industry’s collective reputation, especially in the eyes of a public unwilling to actually learn the mechanics of the industry and already comfortable with thinking of insurance as a necessary evil.
Prudential’s open letter is a refreshing sign. The RAA issue is about as illegitimate as they come. But that has not stopped it from gaining a bit of traction with folks like Andrew Cuomo. Until this issue fully dissipates back into the ether from whence it came, it is nice to see companies like Prudential making statements like this and trying to clear the air with the people who matter most on this issue: its policyholders.