Is the whole Financialized economy based on deception and fraud? .... Now the life insurers.....

[marmar]

Aug. 11 (Bloomberg) -- The Federal Deposit Insurance Corp. is reviewing whether life insurers misled customers about retained death benefits, and urged companies to clearly disclose that the funds aren’t guaranteed by the U.S. government.

Chairman Sheila Bair said an initial review indicates consumers may mistakenly believe the accounts are insured by the FDIC, according to a letter to the National Association of Insurance Commissioners. It is illegal to misrepresent FDIC coverage, Bair said in the letter dated Aug. 5 and posted on the agency’s website today.

“I am writing to express our serious concerns,” Bair says in the letter. Life insurers “should explain that these accounts are not FDIC-insured, and that fact should be clearly and conspicuously disclosed not only to policyholders, but also to their beneficiaries at the time of the policyholder’s death.”

U.S. life insurers have drawn fire from state and national elected officials since Bloomberg Markets magazine reported last month that more than 100 carriers profit by holding and investing $28 billion owed to life-insurance beneficiaries. Retained-asset accounts are backstopped by insurer guaranty associations in the event a carrier fails, according to MetLife Inc., the biggest U.S. life insurer, and the National Organization of Life & Health Insurance Guaranty Associations. ............(more)

The complete piece is at: http://noir.bloomberg.com/apps/news?pid=20601087&sid=a3S0vqMEggzA&pos=4

[OmahaBlueDog]

1. That said, there are reasonably reliable independent organizations that...

...measure the strength of insurers. I'm thinking of AM Best, specifically.

[rucky]

2. I hope they're better than the Wall Street ratings agencies.

If I were to pick just one thing to regulate the hell out of, it would be them. If Moody's did their job, we wouldn't be in the shit we're in now.

[dkf]

3. Except you don't know if they are holding Lehman Brothers bonds.

Or Greek bonds. Or Bank of America Preferred Stock.

People assume when they are given checkbooks that their money is insured because they've been trained to not be worried about the safety of their cash holdings. Even if there are disclosures I doubt the majority of people would understand the significance of what they are reading. It is only once you are warned about this situation that you can read through pages and pages of fine print and get it.

[notesdev]

4. To answer your question

oh yes is it ever

[xchrom]

5. Recommend

[Demeter]

6. In a Word, Yes

and there's no effort afoot to stop it, either.