WAR is a racket. It always has been.It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives... - Maj. Gen. Smedley P. Butler, USMC, Medal of Honor winner, former Commandant
Bloomberg News - When Prudential Financial Inc. invests the death benefits owed to survivors of soldiers killed in battle, the money comes from a source with deep pockets: the federal government,
After a U.S. soldier dies in combat — including the more than 4,000 service members who have been killed in Iraq and Afghanistan — the Department of Veterans Affairs sends Prudential the full amount of each family’s life insurance coverage, usually $400,000.
The government has paid Prudential $1.7 billion for these benefits since 2003, when the war in Iraq began, according to information provided by the VA. Prudential holds that taxpayer money, invests it and reaps the gains.
Here’s how it works: If survivors request a lump-sum payment of the death benefit, Prudential opens a so called retained-asset account, a quasi-checking account that allows families to draw money when they’re ready to spend it.
Until the money is used, it stays in Prudential’s corporate account. There, the insurer invests the funds, mostly in bonds, making returns as much as eight times higher than what it is paying out to holders of the retained-asset account.
What this means is that Prudential is investing - and profiting from death benefits owed to the families of slain soldiers, using money provided by the U.S. government.
“They have what appears to be a nice sweetheart deal with the federal government,” says Michael Powers, professor of risk management and insurance at Temple University in Philadelphia.
“This strikes me as the same sort of thing as those classic stories of the government paying hundreds of dollars for a wrench or a toilet seat.”
Ninety-five percent of survivors paid by Prudential ask for lump-sum payments, the VA says. Since 1999, Prudential has sent out more than 60,000 Alliance Account checkbooks, instead of checks, covering more than $7 billion in death benefits when families asked for full payouts.
On average, Prudential holds about 16 percent of survivors’ money for at least a year, according to Prudential. As of June 30, the company had $662 million belonging to military families in its general account, the VA says.
Prudential’s general account earned 4.2 percent in the first half of 2010, regulatory filings show. The company paid survivors holding Alliance Accounts 0.5 percent in the same period
“It sure looks like the VA provided an ill-conceived giveaway, or that Prudential played the VA like a fool,” says Steven Schooner, (Director of the Government Procurement Law Program at George Washington University Law School in Washington. “It’s a lose-lose proposition for everyone but Prudential.”
Reprinted by The Legendary without permission. Sometimes, you just have to bite the bullet and give it hell. I can only hope the Bloomberg organization is able to overlook my indiscretion, just this once. It's just that American servicemen and their families deserve to know this. - The Legendary
Bloomberg News - When Prudential Financial Inc. invests the death benefits owed to survivors of soldiers killed in battle, the money comes from a source with deep pockets: the federal government,
After a U.S. soldier dies in combat — including the more than 4,000 service members who have been killed in Iraq and Afghanistan — the Department of Veterans Affairs sends Prudential the full amount of each family’s life insurance coverage, usually $400,000.
The government has paid Prudential $1.7 billion for these benefits since 2003, when the war in Iraq began, according to information provided by the VA. Prudential holds that taxpayer money, invests it and reaps the gains.
Here’s how it works: If survivors request a lump-sum payment of the death benefit, Prudential opens a so called retained-asset account, a quasi-checking account that allows families to draw money when they’re ready to spend it.
Until the money is used, it stays in Prudential’s corporate account. There, the insurer invests the funds, mostly in bonds, making returns as much as eight times higher than what it is paying out to holders of the retained-asset account.
What this means is that Prudential is investing - and profiting from death benefits owed to the families of slain soldiers, using money provided by the U.S. government.
“They have what appears to be a nice sweetheart deal with the federal government,” says Michael Powers, professor of risk management and insurance at Temple University in Philadelphia.
“This strikes me as the same sort of thing as those classic stories of the government paying hundreds of dollars for a wrench or a toilet seat.”
Ninety-five percent of survivors paid by Prudential ask for lump-sum payments, the VA says. Since 1999, Prudential has sent out more than 60,000 Alliance Account checkbooks, instead of checks, covering more than $7 billion in death benefits when families asked for full payouts.
On average, Prudential holds about 16 percent of survivors’ money for at least a year, according to Prudential. As of June 30, the company had $662 million belonging to military families in its general account, the VA says.
Prudential’s general account earned 4.2 percent in the first half of 2010, regulatory filings show. The company paid survivors holding Alliance Accounts 0.5 percent in the same period
“It sure looks like the VA provided an ill-conceived giveaway, or that Prudential played the VA like a fool,” says Steven Schooner, (Director of the Government Procurement Law Program at George Washington University Law School in Washington. “It’s a lose-lose proposition for everyone but Prudential.”
Reprinted by The Legendary without permission. Sometimes, you just have to bite the bullet and give it hell. I can only hope the Bloomberg organization is able to overlook my indiscretion, just this once. It's just that American servicemen and their families deserve to know this. - The Legendary
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