A Creepy little Secret of Big Business: Are You a Dead Peasant Employee?

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Dead Peasant Insurance

http://deadpeasantinsurance.com/  

http://www.contingentfeeblog.com/2009/10/articles/corporate-owned-life-insurance/abc-news-interviews-mike-myers-on-dead-peasant-insurance/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+ContingentFeeBusinessLitigationBlog+%28Contingent+Fee+Business+Litigation+Blog%29

On a personal point about the movie, Capitalism: A Love Stroy, it reference deadpeasant insurance, a Big Business scheme to collect money on its' employees in the event of their death... my ex made me sign such a letter so he could collect money if I died.  Of course, being that we just found out that I had Aids, he (probably his ex idea) misled me to believe that some letter that I was signing was unimportant and I shouldn't question him about it or read it.  He insisted that I just sign the letter and not read it and that made me suspicious.  So I did not read it but every time I asked him about the paper I signed he claimed that it never happened.  Well, the jokes on him.  Fucking Asshole...  He died of testical cancer ten years ago and I am still alive. Serves the Bastard right and I hope he burns in hell…  Sorry for venting but I hate him for using me as a business scheme to make his fortune and FUCK him and the horse he rode in on.  

Beware what you are signing is the lesson.

Besides greedy Bastards lovers who think of you as a means to an end if you die of Aids or whatever, watch out if your employer is betting on your demise.

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Wal-Mart's "Dead Peasant" suit against insurers escapes the grave a third time
Posted on May 14, 2009 by Mike Myers
 
Between December 1993 and July 1995, Wal-Mart bought life insurance policies on 350,000 employees and named itself the policies’ beneficiary. Dissatisfied with the return on its investment, Wal-Mart, in 2002, sued the insurers and brokers that sold the policies, including Hartford Life Insurance Company and AIG Life Insurance Company. Three times the Delaware trial court has dismissed Wal-Mart’s case. And three times—most recently on May 12, 2009—the Delaware Supreme Court has reinstated it.
Wal-Mart’s case was first dismissed on statute of limitations grounds by Delaware’s Court of Chancery. The Delaware Supreme Court reversed that dismissal, holding that whether Wal-Mart's suit was time-barred could not be decided on the pleadings.  On remand, the Court of Chancery granted the insurers’ renewed motion to dismiss for failure to state a claim. The Supreme Court affirmed the dismissal of Wal-Mart's claims, except for its claim of equitable fraud. Following the second remand, the case was transferred to the Superior Court, where Wal-Mart again amended its complaint to assert only a common-law fraud claim alleging that it was induced to acquire the policies (sometimes called “corporate-owned life insurance,” “COLI,” “dead peasant” or “janitor” insurance) by the insurers’ fraudulent misrepresentation and concealment of the full magnitude of the tax risks associated with certain policy features, which Wal-Mart calls “structural flaws.”
On October 28, 2008, the Superior Court dismissed Wal-Mart’s case a third time on the ground that Wal-Mart's fraud claim was time-barred under the applicable three-year limitations period.  It also held that Wal-Mart's claim accrued, at the latest, when Wal-Mart made its final COLI purchase in July 1995, and thus expired three years later. The Superior Court also held that the statute of limitations was not tolled by the "discovery rule" because the record showed that the factual basis of Wal-Mart's fraud claim was knowable and known to Wal-Mart long before September 3, 1999 (three years before the date that Wal-Mart filed this lawsuit).
On May 12, 2009, the Delaware Supreme Court reversed the Superior Court ruling and reinstated Wal-Mart’s case a third time when it held:
This 12th day of May 2009, upon consideration of the briefs of the parties and their contentions at oral argument, it appears to the Court that there are material issues of fact as to whether Appellants' alleged injuries were inherently unknowable and whether Appellants were blamelessly ignorant of Appellees' alleged fraud of understating the tax risks associated with Appellants' Corporate-Owned Life Insurance program. These material issues of fact preclude summary judgment on the Statute of Limitations, 10 Del. C. § 8106, in favor of Appellees.
Based on the Supreme Court’s ruling, the case will be returned to the Superior Court where the parties will continue litigation.
Tags: AIG, COLI, Hartford, Wal-Mart, corporate owned life insurace, corporate owned life insurance, dead peasant, janitor insurance
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Federal appeals court: ten-year limitations statute applies to Louisiana "dead peasant" case
Posted on February 13, 2009 by Mike Myers
 
On February 11, 2009, the United States Court of Appeals for the Fifth Circuit issued an opinion in the case Richard v. Wal-Mart Stores, Inc. The case was filed by the estate of a former Wal-Mart employee to recover life insurance benefits that Wal-Mart received from its “corporate-owned” policies; sometimes called “dead peasant” policies. The estate sued under a Louisiana statute that allows estates to recover policy benefits when the designated beneficiary (in this case Wal-Mart) did not have an “insurable interest” in the insured person’s life.     
The district court held that the suit was subject to a one-year statute of limitations and dismissed it for being filed too late. But the court of appeals reversed, holding that the suit was timely under Louisiana’s ten-year statute of limitations. (Read the court’s opinion).
Tags: COLI, COLI law, corporate owned life insurance, dead peasant, insurable interest
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National Law Journal profiles COLI and BOLI suits
Posted on January 30, 2009 by Mike Myers
On January 30, 2009, the National Law Journal published an article by Tresa Baldas that profiles current and potential litigation involving corporate owned life insurance and bank owned life insurance policies (read the article).  The article describes how a recent ruling from the United States District Court for the Northern District of Oklahoma in the case Havenstrite v. Hartford may expose insurance carriers to liability for administering life insurance policies on people without their consent.  The article also addresses the magnitude of the policy benefits from policies of bank owned life insurance and how litigation concerning those policies may be forthcoming.

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Examples of Life Insurance Abuse: Man Shoves Boy From a 400 Foot Cliff to Claim Policy Benefits
Posted on January 13, 2009 by Mike Myers
 
I have previously used this forum to describe instances of life insurance abuse and stress the role that human nature plays in those abusive acts. With the regulation of life insurance practices remaining a noteworthy topic, especially in the context of stranger-owned, bank-owned, and corporate-owned life insurance, these abusive acts should be a constant reminder of the potential harm that may result when a person has an incentive to profit from another’s early death.
One especially horrific example of such abuse involves a scheme devised by Francis Marion Black, Jr., who was convicted of murdering twelve-year-old Marvin Noblitt to claim life insurance benefits. Black was sentenced to death. The appeals court that affirmed Black’s conviction held that there was no doubt that he formed, planned, and committed the crime. His acts were inhuman and the evidence from his trial supported the conviction.
Black and his wife Guinevere were married in 1934 and promptly lost their savings through poor stock investments.  Black schemed to recapture the losses by adopting a boy, purchasing an insurance policy on the child’s life, and then killing him in a way that appeared accidental. He contacted two insurance companies about policies on the life of a boy he “intended to adopt.”  He requested $50,000 in coverage, but was told that he could insure a child for only $5,000.
Black and his wife then moved to San Benito, Texas and began asking about a twelve or thirteen year old boy they could adopt. Black met Marvin Noblitt’s mother, told her that he intended to open an ice cream parlor in San Antonio, and wanted to adopt a boy who would work at the store before and after school. Marvin’s mother refused the adoption. But she allowed Black to take him for six months and said she would reconsider the adoption if Marvin liked the arrangement.
A few days after arriving in San Antonio, Black applied for a $5,000 policy on Marvin from the Acacia Insurance Company, which refused the application. Undeterred, he applied to the Great American Insurance Company for a $5,000 policy. Black lied in the application and stated that he had cared for Marvin since taking him from an orphanage in Oklahoma. Great American issued the policy on May 29, 1938 and named Black as the policy beneficiary.
Within a week, Black and Guinevere packed all of their possessions and began driving to San Antonio with Marvin. They stopped in Alpine, Texas on June 8th. Black went to a local drug store the next morning and asked about post cards of the Grand Canyon, the local mountain scenery and places of interest within a hundred miles of Alpine.  The pharmacist did not have the post cards, but suggested that Black visit Alpine’s Chamber of Commerce.  He did so and asked about the Limpia, Grand, and Santa Helena Canyons.  The Chamber of Commerce gave him information about the scenic beauty of the country and Agua Frio Springs, located at the foot of a 400 foot cliff.  Later that day, Black went to Agua Frio Springs.
The Agua Frio Springs were on a private ranch and the ranch’s owner appeared at Black’s trial. He testified that the springs were located at the foot of a cliff, approximately 400 feet high.  He also testified that Black, accompanied by his wife and a child, arrived at the ranch on June 9th at about 5 p.m. and asked for permission to look at the springs, the bluff, and the scenery.  He granted Black’s request and, in a very short time, saw two people on top of the cliff rolling stones into the canyon.  About thirty minutes later, Black went to the ranch house and reported that his little boy had fallen off the cliff and was injured.  The rancher drove his truck to the foot of the cliff and brought Marvin’s mangled body back to the ranch house. Marvin’s body was then taken to an undertaker in Alpine.
Black told the undertaker that he had adopted the boy but had not yet gone through all of the legal formalities. He added that he had taken the boy from Oklahoma about a year earlier and that there was no reason to delay the burial because he did not think he could ever find the boy’s mother.  Black also said that he did not have much money and asked if the undertaker would help him collect a $5,000 insurance policy on the boy’s life.
After the funeral, Black and Guinevere were arrested and charged with homicide. Black made a written confession in which he admitted the killing. The confession stated that Black went to the top of the cliff with the boy, threw a few rocks, and then shoved the boy off the cliff.
Tags: BOLI, BOLI law, COLI, COLI law, STOLI, STOLI law, corporate owned life insurance, life insurance, life insurance abuse

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Havenstrite v. Hartford: Court Holds That Employees Insured by COLI Policies Have a Claim Against the Insurer
Posted on January 5, 2009 by Mike Myers
 
     On December 31, 2008, the United States District Court for the Northern District of Oklahoma held that employees whose lives were insured by an employer’s secret policies of corporate-owned life insurance possess a claim against the insurer that administered the policies for misusing the employees’ identities and personal information. (Read the Court’s opinion).
     Corporate-owned life insurance or “COLI” is insurance held by a company on the lives of its employees, or former employees, with the company named as the policy beneficiary. Because the company designates itself as the policy beneficiary, the insurer pays the policy benefits to the company when a covered employee dies.
     The plaintiffs in the case Havenstrite v. Hartford Life Insurance Company alleged that Hartford used their names, Social Security numbers, and other personal information without their consent or knowledge to administer and maintain the secret COLI policies on their lives. They claimed that Hartford violated an Oklahoma statute that provides a recovery against any person who, without consent, uses another’s name in products, merchandise, or goods. They also claimed that Hartford committed a common law invasion of privacy by misappropriating their names and identities when Hartford used that information in its insurance policies and administrative reports.
    Hartford asked the Court in the Havenstrite case to dismiss the claims against it by arguing that the plaintiffs’ names did not have any special value. The Court refused Hartford’s request and applied Oklahoma’s law that “one who appropriates to his own use or benefit the name or likeness of another is subject to liability to the other for invasion of his privacy.” The Court concluded that the plaintiffs adequately alleged that Hartford “appropriated to Hartford’s own use and benefit the commercial value of their names and private personal identifiers by receiving premiums, commissions and service and administration fees.”
     Between five and six million Americans are covered by a COLI policy, according to an attorney for Hartford.  COLI policies are sometimes referred to as"Janitor" or “Dead Peasant” policies.  "Dead Peasant insurance" is a phrase used within the insurance industry to describe the deceased employees whose lives were insured by one of the policies.
 
Tags: COLI, COLI law, STOLI law, corporate owned life insurace, corporate owned life insurance, dead peasant, janitor insurance
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BOLI Increases May Reflect Institutions' 2008 Success or Failure
Posted on December 18, 2008 by Mike Myers
 
2008 was a dismal year for some of the country’s largest financial institutions. But it was a relatively good year for others. By coincidence or otherwise, the successes and failures of these institutions appear to be reflected by increases in their reported holdings of bank owned life insurance or BOLI.
An increase in BOLI holdings will generally result from one of three events, or some combination of them. Reported BOLI holdings may increase because the bank bought new policies on its employees. They may also increase when the reporting bank acquires a competitor and, during the process, the competitor’s BOLI policies. Increases may also occur when investment returns raise the cash surrender value of existing policies.
            Over the preceding four quarters, BOLI holdings of Bank of America, Citibank, Wachovia, Washington Mutual, and Wells Fargo have been:
                        Dec. 07            Mar. 08            June 08            Sept. 08           % increase
BOA                14.3B               14.5B               16.5B               17.1B                  19.5
Citi                   3.9B                 4.03B               4.05B               4.1B                       5
Wachovia       14.6B               14.4B               14.5B               14.6B                     0
WaMu             4.9B                 5.028B             5.072B             no report               3.4
Wells Fargo    4.9B                 5.15B               5.19B               5.36B                   9.38
While the relationship between BOLI increases and institutional success may be coincidence, a correlation exists nevertheless. Bank of America, with its 19.5% increase in BOLI holdings, recently reported third quarter 2008 net income of $1.18 billion, or $0.15 per share, a figure far lower than a year ago but significant in relation to other 2008 returns in the industry. Bank of America also received approval for the $50 billion acquisition of Merrill Lynch. Wells Fargo likewise achieved solid growth in loans and deposits during 2008 and is on track to complete its acquisition of Wachovia by year’s end. This success correlates to Wells Fargo’s 9.38% increase in BOLI holdings over the last year.
Wachovia, Citibank and Washington Mutual did not fare as well in 2008. Citibank required bailout money from the federal government and has cut tens of thousands of jobs during the year. Wachovia and Washington Mutual were acquired by competitors while on the brink of collapse. These failures correlate to the relatively pedestrian increases in their BOLI holdings. But perhaps the most interesting question is why their BOLI holdings increased at all (Wachovia’s did not). It seems unlikely that these institutions invested their cash in additional policies. The reported increases may therefore be attributable to investment gains which, at these percentages, are similar to the returns available from treasury bills or similar investments.
 
Tags: BOLI, Bank of America, Citibank, Wachovia, Washington Mutual, Wells Fargo, bank owned life insurance, corporate owned life insurance

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Will Chase And Wells Fargo Benefit From The Deaths Of WaMu And Wachovia's Former Employees?
Posted on October 29, 2008 by Mike Myers
 
     Washington Mutual and Wachovia have two things in common. First, they were spectacular business failures. Second, they were two of the nation’s largest holders of “bank owned life insurance” or “BOLI” policies. The combination of these two facts creates interesting issues concerning the legality of the BOLI policies and who may benefit from the deaths of the banks’ former employees.
     Bank owned life insurance generally refers to policies that a bank purchases on the lives of its employees. But unlike traditional forms of life insurance, the bank designates itself as the policy beneficiary—meaning that the bank is entitled to the policy benefits when the insured employee dies. BOLI policies also remain in force even if the insured person no longer works for the bank. The policies are therefore similar to those often referred to as “dead peasant” or “janitor” insurance.
     Washington Mutual and Wachovia had enormous appetites for BOLI policies. As of June 30, 2008, Washington Mutual reported to the Office of Thrift Supervision that it maintained $5.072 billion in BOLI holdings. Wachovia likewise reported a staggering $14.575 billion of BOLI holdings.  Notably, those amounts are reported in cash surrender value, meaning that the policies’ benefit amounts are likely substantially higher.
     Washington Mutual’s assets were acquired by JP Morgan Chase in September and Wachovia was acquired by Wells Fargo earlier this month. These transactions create interesting questions concerning the validity of the policies on the lives of the former employees and who may profit from their deaths.
     Assuming that the Washington Mutual and Wachovia employees consented to the BOLI policies on their lives (a big assumption indeed), Washington Mutual and Wachovia may have had the insurable interest necessary to support the BOLI policies. But what about JP Morgan Chase and Wells Fargo? WaMu and Wachovia employees, especially former employees who left long before the collapse, probably never imagined that Chase and Wells Fargo might one day benefit from their deaths. Thus, two issues surface. First, who will receive the BOLI policy benefits when WaMu and Wachovia’s former employees die? Second, if Chase and Wells Fargo are the expected beneficiaries of those policies, do they have the insurable interest necessary to ensure the policies’ validity?
 For more information on this topic, please contact any of the firm's partners at mmellp.com.
Tags: BOLI, Chase, JP Morgan Chase, Wachovia, Washington Mutual, Wells Fargo, bank owned life insurance, corporate owned life insurance, dead peasant, insurable interest
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Life Settlements, STOLI Pose Potential Insurable Interest Problems
Posted on October 28, 2008 by Mike Myers
     Virtually every jurisdiction in the United States recognizes a person’s right to insure his or her own life and name another as the policy beneficiary, either through an assignment or express designation. The designated beneficiary or assignee is thereafter deemed to have an insurable interest in the insured person’s life by virtue of that designation or assignment.
     In the context of life or viatical settlements, the requirement of an insurable interest is typically satisfied when the insured person assigns the policy to the purchaser. The insured person in a “stranger owned life insurance” or “STOLI” transaction may likewise satisfy the insurable interest requirement through designation or assignment. Thus, it is arguable that the beneficiary in both life settlement and STOLI transactions have an insurable interest in the insured person’s life because of the assignment—an act taken by the insured person himself.
     One matter absent from the current debate over life settlement and STOLI transactions, however, involves the maintenance of an insurable interest after a secondary transfer of the policy. Most contracts may be transferred time and time again. But life insurance policies are not like most contracts because the requirement of an insurable interest is a fundamental. It is therefore likely that the second (or third, or fourth) assignee of the life insurance contract will not have an insurable interest in the insured person’s life—the insured person did not assign the policy to the subsequent owner or name it as the policy beneficiary. And in many jurisdictions, the absence of an insurable interest renders the policy void as a wagering contract that violates public policy.
 
     To learn more about this topic, please contact any of the firm's partners at mmellp.com.
Tags: STOLI, corporate owned life insurance, insurable interest, life settlement, stranger owned life insurance, viatical settlement
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How "Dead Peasant" Insurance Got Its Name
Posted on August 13, 2008 by Mike Myers
   Corporate owned life insurance (policies that pay death benefits to an employer when its employees die) has been a frequent subject of debate for several years. These debates include the morality of employers insuring their employees’ lives without consent, to legality under state law, to the policies’ use as a federal income tax sham. And in virtually every debate, the phrases “dead peasant” or “janitor” insurance are used to describe the coverage.

    Defenders of corporate owned life insurance claim that “dead peasant insurance” is an inflammatory description created by the media. A law firm that represents large corporations that bought the insurance argues, for example, that COLI plans have been “christened by the media” as dead peasant policies. Others have argued that the media has “sensationalized” stories with phrases like “janitor” and “dead peasant” insurance.

    These criticisms fairly raise the question “How, in fact, did dead peasant insurance get its name?”

    In 1993, Winn Dixie Stores bought COLI policies on approximately 36,000 of its employees, without their knowledge or consent. The Coventry Group, a large insurance brokerage firm well-versed in COLI transactions, helped place the policies, which were underwritten by AIG Life Insurance Company. On October 30, 1996, Lawrence J. Kramer, the Coventry Group’s vice president and general counsel, distributed a memo stating “Here is a very rough beginning of the booklet we are preparing for Winn-Dixie.  A section on Dead Peasants remains to be written, and Peggy is preparing sample journal entries for various scenarios.” The “dead peasants” referenced in the memo were deceased Winn-Dixie employees whose deaths resulted in policy benefits to the company. A similar memo states “I want a summary sheet that has Surrender in one column, the Exit Strategy 1A in the second column and the Dead Peasants in the third column.”

    These memos were part of the court’s record in a lawsuit in which the United States Court of Appeals for the Eleventh Circuit held that Winn-Dixie’s COLI policies were a sham transaction for federal income tax purposes. The memos were later used by reporters such as Ellen Schultz and Theo Francis of the Wall Street Journal and L.M. Sixel of the Houston Chronicle and incorporated into articles about corporate owned life insurance. Thus, the phrase “dead peasant insurance” is not a creation of the media. It is a term used within the insurance industry to describe employees whose lives are insured by policies of corporate owned life insurance for an employer’s benefit.
     For more information on this topic, contact any of the firm's parters at mmellp.com.
Tags: COLI, Winn Dixie, corporate owned life insurance, dead peasant, janitor insurance

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How "Dead Peasant" Insurance Got Its Name
Posted on August 13, 2008 by Mike Myers
   Corporate owned life insurance (policies that pay death benefits to an employer when its employees die) has been a frequent subject of debate for several years. These debates include the morality of employers insuring their employees’ lives without consent, to legality under state law, to the policies’ use as a federal income tax sham. And in virtually every debate, the phrases “dead peasant” or “janitor” insurance are used to describe the coverage.

    Defenders of corporate owned life insurance claim that “dead peasant insurance” is an inflammatory description created by the media. A law firm that represents large corporations that bought the insurance argues, for example, that COLI plans have been “christened by the media” as dead peasant policies. Others have argued that the media has “sensationalized” stories with phrases like “janitor” and “dead peasant” insurance.

    These criticisms fairly raise the question “How, in fact, did dead peasant insurance get its name?”

    In 1993, Winn Dixie Stores bought COLI policies on approximately 36,000 of its employees, without their knowledge or consent. The Coventry Group, a large insurance brokerage firm well-versed in COLI transactions, helped place the policies, which were underwritten by AIG Life Insurance Company. On October 30, 1996, Lawrence J. Kramer, the Coventry Group’s vice president and general counsel, distributed a memo stating “Here is a very rough beginning of the booklet we are preparing for Winn-Dixie.  A section on Dead Peasants remains to be written, and Peggy is preparing sample journal entries for various scenarios.” The “dead peasants” referenced in the memo were deceased Winn-Dixie employees whose deaths resulted in policy benefits to the company. A similar memo states “I want a summary sheet that has Surrender in one column, the Exit Strategy 1A in the second column and the Dead Peasants in the third column.”

    These memos were part of the court’s record in a lawsuit in which the United States Court of Appeals for the Eleventh Circuit held that Winn-Dixie’s COLI policies were a sham transaction for federal income tax purposes. The memos were later used by reporters such as Ellen Schultz and Theo Francis of the Wall Street Journal and L.M. Sixel of the Houston Chronicle and incorporated into articles about corporate owned life insurance. Thus, the phrase “dead peasant insurance” is not a creation of the media. It is a term used within the insurance industry to describe employees whose lives are insured by policies of corporate owned life insurance for an employer’s benefit.
     For more information on this topic, contact any of the firm's parters at mmellp.com.
Tags: COLI, Winn Dixie, corporate owned life insurance, dead peasant, janitor insurance
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Origin Of The Insurable Interest Doctrine
Posted on August 4, 2008 by Mike Myers
     It is well-understood in modern society that a person may not use an insurance policy to profit from another's loss of life or property. One cannot, for example, insure the life of a NASCAR driver with the hope that he will be killed in the next race. Likewise, one cannot insure his neighbor’s house and then burn it down to receive the policy benefits. Modern laws exist to remove the incentive for wrongdoing through insurance policies. But using life and property insurance contracts to benefit from another person's misfortune has not always been prohibited. And that which we now accept as forbidden was, at one time, commonplace.
     The insurable interest doctrine, as recognized today, originated in English statutes designed to remove insurance contracts from the environment of gambling and the misconduct commonly associated with one having the ability to profit from another’s loss. As described in the Appleman insurance treatise, English underwriters of the eighteenth century insured marine risks without requiring the policy beneficiary to have an interest in the vessel or its cargo. The practice created an incentive to destroy the insured property by those expecting to receive insurance benefits from the loss. The English Parliament reacted to the situation in 1749 by enacting the Statute of George II (19 Geo. 2, ch. 37 (1746)), which recognized that “a mischievous kind of gaming or wagering” had caused “great numbers of ships, with their cargoes, [to] have . . . been fraudulently lost and destroyed . . . .” The statute sought to remedy the situation by declaring that assurances for shipping risks not supported by an interest, or by way of gaming or wagering, would be “null and void to all intents and purposes.”
     According to Appleman, enterprising Englishmen insured the lives of famous persons reported to be seriously ill and the “unfortunate gentlemen” accused of crimes punishable by death. The amount wagered was the policy premium and the gamble, obviously, was whether the insured person lived or died.
     The wagers had a substantial, negative impact on the persons whose lives were insured. In his 1761 publication “The Mystery and Inquiry of Stock Jobbing,” Thomas Mortimer wrote:
The inhuman sport affected the minds of men depressed by long sickness; for when such persons, casting an eye over a newspaper for amusement saw that their lives had been insured in the Alley at 90 per cent, they despaired of all hopes; and thus their dissolution was hastened.
In 1774, Parliament enacted a statute (14 Geo. 3, ch. 48 (1774)) to discourage the “mischievous kind of gaming” on human life:
no insurance shall be made . . . on the life or lives of any person or persons, or on any other event or events whatsoever, wherein the person or persons for whose use, benefit, or on whose account such policy or policies shall be made, shall have no interest . . ..
            The English Statutes of George II and George III form the fundamental principles of the insurable interest doctrine by requiring owners of property and life insurance to have an “interest” the subject matter of those contracts. The insurable interest requirements were promptly announced in the United States, even though American courts did not embrace the English statutes and, in some instances, rejected them. In the 1806 case Russel v. Union Ins. Co., the United States Supreme Court addressed the necessity of an insurable interest in property insurance.  Similar opinions soon followed in the context of life insurance.
Tags: corporate owned life insurance, insurable interest, insurance, life insurance
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How Much Are Citigroup's Former Employees Worth Dead?
Posted on August 1, 2008 by Mike Myers
     Since the beginning of 2008, Citigroup has made thousands of employee layoffs and is poised to discharge thousands more by year’s end. The layoffs may ultimately total between 17,000 to 24,000 employees due to subprime and credit-related losses, according to CNBC.
     The layoffs raise the interesting question, “how much are Citigroup’s former employees worth dead?”
     Citibank, N.A., like many national banks, invests heavily in policies of bank owned life insurance or “BOLI.” BOLI policies insure the lives of the bank’s employees, but unlike traditional life insurance name the bank as the policy beneficiary. When the bank employee dies, the insurance benefits are paid to the bank.
     Banks, like Citibank, are required to report their life insurance holdings through reports filed with the Federal Financial Institutions Examination Council and report those holdings on line five of a schedule called “RC-F—Other Assets.” Those reports demonstrate that Citibank has acquired billions of dollars of BOLI coverage on the lives of its employees since 2006. Citibank possessed $2.215 billion in BOLI coverage as of March 31, 2006, $3.325 billion as of March 31, 2007, and $3.99 billion as of December 31, 2007. Notably, banks report their life insurance assets in terms of cash surrender value, meaning that the policy benefits due from employee deaths are likely far greater than the amount reported on the schedules.
     BOLI policies remain in force even if the insured person’s employment with the bank ends. Thus, Citibank will receive insurance benefits upon the deaths of its former employees who were insured by a BOLI policy. As the employees who were laid off in 2008 die, policy benefits will flow to Citibank. And from a pool of 17,000 to 24,000 former employees, those benefits may be significant, even by Citibank’s standards.
Tags: BOLI, Citibank, Citigroup, Citigroup layoffs, bank owned life insurance, corporate owned life insurance, insurance, life insurance

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http://unlvrebelyell.com/2010/03/23/the-corporations-are-in-control/

The corporations are in control 
March 23, 2010 by Afan Tarar

Corporate banks are cashing in on people to their graves
Click image to enlarge.
The more I learn about the banking industry and corporate America, the more it disturbs me.

We are told that we are a society that believes in the rules of the free market, but the way lawmakers are allowing these firms to run has nothing to do with free market economics. It seems like anything goes.

One thing I learned that corporations do to make money is an insurance trick called “dead peasant” insurance. Dead peasant insurance is coverage that a company can take out on one of its workers.

It’s basically a life insurance policy that names your employer as the beneficiary, often without your consent.

When the insured worker dies, the company gets money for it. There is nothing inherently wrong with a life insurance policy, but the trick is that companies do not have to tell their workers that they are insured.

When you die, the corporation could collect and they do not even have to inform your family that they just earned money from your death.

Of course I cannot take an insurance claim out on anyone other than myself because if I do that, then I would have financial incentive in that person’s death and I would make profit from it. But apparently it’s OK for corporations to do that.

Another thing that corporations can do is take out insurance on other corporations. They would make money if the other corporation went under. One example: Goldman took out insurance on AIG, basically betting that AIG would fail. This is just another way businesses are making a quick buck.

One more thing that I was shocked to discover was a document made by Citi Group. Citi Group called this nation a plutonomy, in which wealth in mostly powered and consumed by the wealthy and highlighted how big the gap between the rich and the poor really is.

They spoke to length about how America was still surviving even though we have no savings and the value of the dollar is declining.

What these Harvard MBAs figured out was that because the rich control more than 58 percent of the nation’s wealth, and because their wealth is increasing, they do not need to save.

They can keep on spending because they make so much money.

Citi Group went on to talk about how this wealth was generated at the expense of labor. The ultimate conclusion was that the rich would continue to get richer but that this would cause some problems.

People with less wealth could stand in the way because as the rich get more wealth, we are left with even less.

“At some point it is likely that labor will fight back against the rising profit share of the rich and there will be a political back lash against the rising wealth of the rich.

This could be felt through higher taxation (on the rich or indirectly through higher corporate taxes/regulation) or through trying to protect indigenous laborers,” according to the Citi Group report.

It’s time to make those problems a reality. It’s time we regulate the industry that considers itself the new aristocracy and thinks that it can live off our tax dollars.

Congress will only take action if the people show their outrage. Otherwise, they will ignore the unjust situation because of its political ramification.

Corporations and free enterprise can have positive impacts but we need to make sure that the swindling and unethical business practices that corporate America has gotten into are stopped.

On one hand corporations say that they deserve equal rights as they are legal “human beings,” on the other hand they want special privileges because of their status.

It seems that America has fallen under corporate tyranny and we must resist. The big firms knew that the crash was coming but they wanted to make more money and their greed got the better of them.

We must keep regulate Wall Street and hold them accountable for their actions. A message needs to be sent from the “peasants” and this plutonomy must be taken down. This is not America: I refuse to be a peasant.

[red_Dragon888]

http://deadpeasantinsurance.com/which-employers-bought-policies-on-the-lives-of-employees/

Which employers bought policies on the lives of employees?
Because a company’s purchase of insurance policies is not a public record, it is virtually impossible to know every company that invested in policies on employees’ lives. The following companies, however, are believed to have been named as the beneficiary of life insurance policies on employees:

ADAC Laboratories
Advanced Telecommunication Corp.
Aeroquip Vickers Inc.
Alabama Power Co.
Alfa Corp.
Allegheny Technologies Inc.
Allergan Inc.
Allfirst Financial Inc.
American Business Products, Inc.
American Electric Power
American Express Co.
American Greetings Corp.
American Management Systems Inc.
American Seafoods Group LLC
Ameritech Corp.
Amerus Group Co.
Anadarko Petroleum Corporation
Appalachian Power Co.
Arch Chemical
Aristech Chemical Corp.
AT&T Communications
Atlantic Richfield Co.
Avery Dennison Corp
Avon Products Inc.
B. F. Goodrich Company
Ball Corporation
Bank Boston
Bank Of America
Bank One Corp.
Barnett Banks Inc.
Bassett Furniture Industries Inc.
Be Aerospace Inc.
Bear Stearns Companies
Bellsouth Corporation
Boise Cascade Corp.
Boston Company
Boston Federal
Bristol-Myers Squibb Company
Camelot Music, Inc.
Carolina Power & Light Co.
Carpenter Technology Corp.
Catskill Financial Corp.
Central Power & Light Co.
Ch2m Hill Companies Ltd.
Charming Shoppes, Inc.
Checkfree Corp.
Chemical Banking Corporation
Citibank, N.A.
Citizens Bank
Clark Inc.
Clorox Company
CNF Inc.
Coca-Cola Company
Columbus Southern Power Co.
Commercial Intertech Corp.
Compass Bank (Florida & Alabama)
Computer Technology Associates Inc.
Consolidated Natural Gas Co.
Consolidated Rail Corporation
Cox Enterprises, Inc.
CTA Inc.
Cymer Inc.
Diamond Shamrock Inc.
Diebold Inc.
Dime Bancorp Inc.
Dow Chemical
Earle M. Jorgensen Co.
Eastman Kodak Company
Eaton Corp.
ECC Capital Corp.
Enserch Corp.
F&M Bancorp
FiberMark Inc.
Figgie International Inc.
Fina Oil & Chemical Company
First Bank System Inc.
First Commonwealth
First Midwest Bancorp Inc.
Fleet Bank
FleetBoston Financial Corp.
Flightsafety International Inc.
Frontier Bank
Fulton Financial Corp.
GATX Corporation
Georgia Power Co.
GNC Corp.
Great Plains Energy Inc.
GTE Corporation
Gulf Power Co.
HCR Manor Care Inc
Hechinger Company
Heritage Commerce Corp.
Herman Miller Inc.
Hershey Foods Corporation
Hillenbrand Industries, Inc.
Hosiery Corporation of America
Houghton Mifflin
Household Finance
Hovnanian Enterprises Inc.
Hughes Supply Inc
ICI Americas, Inc.
Idaho Power Company
IKON Office Solutions Inc.
Indiana Michigan Power Co.
Integra Bank Corp.
Intermark Inc.
Iowa First Bancshares Corp.
Iroquois Bancorp Inc.
J Jill Group Inc.
JP Morgan Chase & Co.
Kansas City Power & Light
Kansas Gas & Electric Co.
Keithley Instruments Inc.
Kentucky Power Co.
Keycorp Ohio
Kimberly Clark
Korn Ferry International
Laser Master Int’l. Inc.
Linens N Things Inc.
LKQ Corp.
Louisiana Pacific Corp.
Manor Care Inc.
Marriott International Inc.
McDonnell Douglas Corp.
Media General Inc.
Medicalcontrol Inc.
Menasha Corporation
MidAmerican Energy Co.
Miix Group Inc.
Mississippi Power Co.
MNC Financial Inc.
Mueller Industries Inc.
National City Corporation
NationsBank
Nestle Enterprises
Norfolk Southern Corp.
Norfolk Southern Railway Co.
Northern States Power Co.
Ohio Power Co.
Old National
Olin Corporation
Owens & Minor Inc.
PacifiCorp
Panera Bread Co.
Panhandle Eastern Pipe Line Company
Parker Hannifin Corp.
Penn Treaty American Corp.
Penns Woods Bancorp Inc.
Phibro Animal Health Corp.
Philipp Brothers Chemicals Inc.
Phoenix Companies Inc.
Pinnacle Financial Services Inc.
Portland General Electric
Potlatch Corporation
PPG Industries
Procter & Gamble Company
PSS World Medical Inc.
Public Service Co. of New Mexico
Public Service Co. of Oklahoma
Public Service Enterprise Group
Questech Inc.
R. R. Donnelley & Sons Company
Ruddick Corp.
Ryder System Inc.
Sallie Mae (Stud Ln Mktg Assoc.)
Savannah Electric & Power Co.
Sequa Corp.
Service Merchandise Co., Inc.
Shearson Mortgage
Sherwin-Williams
Sky Chefs
Smart & Final Inc.
Smith Barney
Sonoco Products Co.
Southwest Bank
Southwest Water Co.
Southwestern Bell Corp.
Southwestern Electric Power Co.
Southwestern Public Service Co.
Star Banc Corp.
Stauffer Management Company
Steelcase Inc.
Sturgis Bancorp Inc.
Summit Bank of N.J.
Swank, Inc.
Tellabs Inc.
Tenet Healthcare Corp.
Texas Eastern Transmission Corp.
Tompkins Trustco Inc.
TXU Corp.
TYCO International
UniFirst Corp.
Union Bank
United National Bancorp
Urocor Inc.
Vineyard National Bancorp
W. R. Grace & Company
Wachovia Corporation
Walgreen Company
Wal-Mart Stores
Walt Disney
Wang’s International, Inc.
Wells Fargo, N.A.
West Coast Bancorp
West Texas Utilities Co.
Westar Energy Inc.
Western Aire Chef Inc
Western Resources, Inc.
Westpoint Pepperell
Winn Dixie
Winnebago Industries Inc.
Woolworth Corporation
Xcel Energy Inc.
York Water Co.
Zale Corp.

[red_Dragon888]

SIGNIFICANT CLASS ACTION CASES:
Cause Number 02-CV-944-EA(M); Lewis v. Wal-Mart Stores, Inc., in the United States District Court for the Northern District of Oklahoma (a case involving the certification of a plaintiff class for settlement of $5.097 million, from which approximately $1.7 million was awarded for attorneys’ fees and expenses);

Cause Number. E 170245; Payne v. Fina Oil and Chem. Co., in the 172nd District Court of Jefferson County, Texas (a case involving the certification of a plaintiff class for settlement of $4 million, from which $1.33 million was awarded for attorneys’ fees and expenses);

Cause Number H01-2139; Mayo v. Hartford Life Insurance Company, in the United States District Court for the Southern District of Texas, Houston Division, (a case involving the certification of a plaintiff class for settlement of $10.362 million, from which $3.454 million was awarded for attorneys’ fees and expenses);

Cause Number 97-08264; Travelers Indemnity Company of Connecticut v. Texas Workers’ Compensation Insurance Facility; in the 250th Judicial District Court of Travis County, Texas, (a case involving the certification of two classes for settlements of approximately $69 million, from which approximately $8.6 million was awarded for attorneys’ fees and expenses);

Cause Number 91-05637; Weatherford Roofing Company, et al. v. Employers National Insurance Company, et al.; in the 116th Judicial District Court of Dallas County, Texas, (a case involving the certification of 14 plaintiff classes for settlements of approximately $208 million, from which approximately $69 million was awarded for attorneys’ fees and expenses).

REPORTED CASES:
Richard v. Wal-Mart Stores, Inc., 559 F.3d 341 (5th Cir. 2009);
Meadows v. Hartford Life Insurance Company, 492 F.3d 634 (5th Cir. 2007);
Tillman v. Camelot Music, Inc., 408 F.3d 1300 (10th Cir. 2005);
Mayo v. Hartford Life Insurance Company, 354 F.3d 400 (5th Cir. 2004);
Sandwich Chef of Texas, Inc. v. Reliance National Indemnity Insurance Company, 319 F.3d 205 (5th Cir. 2003);
DeLeon v. Lloyd’s London, 259 F.3d 344, 350 (5th Cir. 2001);
Specht v. Maximus, Inc., 526 F.Supp.2d 740 (W.D. Tex. 2007);
Clower v. Orthalliance, Inc., 337 F.Supp.2d 687 (N.D. Ga. 2004);
Mayo v. Hartford Life Insurance Company, 220 F. Supp.2d 794 (S.D. Tex. 2002);
Mayo v. Hartford Life Insurance Company, 220 F. Supp.2d 714 (S.D. Tex. 2002);
Mayo v. Hartford Life Insurance Company, 214 F.R.D. 465 (S.D. Tex. 2002);
Mayo v. Hartford Life Insurance Company, 214 F.R.D. 458 (S.D. Tex. 2002);
Sandwich Chef of Texas, Inc. v. Reliance National Indemnity Insurance Company, 202 F.R.D. 212 (S.D. Tex. 2001);
Sandwich Chef of Texas, Inc. v. Reliance National Indemnity Insurance Company, 111 F. Supp.2d 867 (S.D. Tex. 2000);
Liberty Mut. Ins. Co. v. Texas Dep’t of Ins., 187 S.W.3d 808 (Tex.App.–Austin, pet. denied).
Wall Street Deli, Inc. v. Boston Old Colony Ins. Co., 110 S.W.2d 67 (Tex. App.—Eastland 2003, no pet.);
Torrez v. Winn-Dixie Stores, Inc., 118 S.W.3d 817 (Tex.App.—Fort Worth 2003, pet. dism’d);
Certain Underwriters at Lloyd’s, London v. Smith, 77 S.W.3d 859 (Tex. App.–Houston [14th Dist.]), withdrawn, 93 S.W.3d 657 (Tex. App.–Houston [14th Dist.] 2002);
Tamez v. Lloyd’s London, 999 S.W.2d 12 (Tex. App.–Houston [14th Dist.] 1998, pet. denied);
Stillwagoner v. Travelers, 979 S.W.2d 354 (Tex. App.–Tyler 1998, no pet.).
TELEVISION APPEARANCES AND NEWS ARTICLES:
Prime News with Erica Hill, CNN, July 3, 2007.
Million-Dollar Check, Widow Got Nome, THE WALL STREET JOURNAL, February 24, 2009.
Secret life insurance triggers suits, NATIONAL LAW JOURNAL, January 30, 2009.
Policies offer small business a credit lifeline, INVESTMENT NEWS, December 14, 2008.
Attorney: Wal-Mart Collected on Deaths, TAMPA TRIBUNE, July 3, 2007.
Wal-Mart Settles Insurance Lawsuit, ST. LOUIS POST-DISPATCH, December 6, 2006.
Wal-Mart: Class-Action Lawsuit Settled, TULSA WORLD, December 5, 2006.
Betting on the Lives of Teachers, HOUSTON CHRONICLE, December 11, 2003.
Teacher Pension Proposal Criticized, HOUSTON CHRONICLE, December 5, 2003.
Les Mortelles Combines Des Patrons Américains, LEMONDE, March 18, 2003.
‘Issue of Right and Wrong’ Lawmakers Offer Up Bills on ‘Dead Peasant’ Policies, HOUSTON CHRONICLE, December 12, 2002.
Law Firm Sees Niche in ‘Dead Peasant’ Policy Defense, HOUSTON CHRONICLE, August 16, 2002.
Better Off Dead?, U.S. NEWS & WORLD REPORT, May 6, 2002.
‘Dead Peasant’ Policies Benefit Top Executives, HOUSTON CHRONICLE, April 24, 2002.
Convenience Store Chain Paying to Settle Suits on Secret Policies, HOUSTON CHRONICLE, April 19, 2002.
Worker Dies, Firm Profits – Why?, WALL STREET JOURNAL, April 19, 2002.
Profiting From Death?, HOUSTON CHRONICLE, April 16, 2002.
14th Court Buries Stop N Go Death Policy, TEXAS LAWYER, January 25, 1999.
Insurers to Settle Class Action Suit, WORKERS’ COMPENSATION REPORT, July 6, 1998.

[red_Dragon888]

http://www.scrippsnews.com/node/52528

Death panels aren't such a bad idea

Submitted by SHNS on Fri, 03/26/2010 - 16:28 By GARY EMMONS, The Providence Journaleditorials and opinionShareThis BOSTON - Like other folks of a certain age, I'm starting to get unsolicited AARP mailings. I know what that means. The jig's up. I'm toast.
Somewhere off stage, the Grim Reaper is putting whetstone to scythe, getting ready for the fat lady to sing my swan song. My graying buddies and I, whistling past this new shadow in the back of our minds, have started making those tired old jokes about not buying green bananas, about how our life insurance makes us worth more dead than alive. Ladies and gentlemen of the Woodstock era, although we like to believe that we're forever young, the time has come to think about exit strategies.
For me, these hints of mortality have only grown stronger during the uproar over Obamacare. It would have been unfortunate if the plan had been killed, so to speak -- we would have lost out on those "death panels" that reform foes found in the legislation.
I've looked into death panels and I for one think they're not such a bad idea. After all, what with a ruined economy, demolished nest eggs, and the specter of cutbacks in Social Security and Medicare, things aren't looking so rosy for us incipient seniors. For those of us who aren't Fortune 500 CEOs, the death panels could offer a new benefit, a sort of golden parachute -- you jump, it doesn't open, and the result is all good.
Let me explain. The government -- that's you and me, fellow taxpayers -- would save a pile of money if old people just checked out, whether they're sick or not. Compared with footing the bill for long-term care, that would be a big money-saver for John and Joan Q. Public. And seniors would have a nice little windfall to pass on to their kids and grandkids in these tough times. It would be a win/win for oldsters who've just had enough, for any number of good reasons, as well as for a beleaguered Uncle Sam who, by the way, isn't looking so hot these days, either, have you noticed?
Such a program would also help ease the minds of those citizens upset about the deficit. Even better, the program could eventually be handed off to the private sector, which, as we know, runs things efficiently and conscientiously. Some will decry this, saying that something so sensitive shouldn't be run for profit. But the end-of-life industry (funeral homes, cemeteries, flower shops, backhoes, etc.) is already a multibillion-dollar business. And companies already take out life-insurance coverage (known as "dead peasant" policies) on unwitting employees and keep the proceeds when they croak. Rest assured: The private sector knows what it's doing when it comes death and dying.
Of course, seniors should have options on the manner in which they choose to check out for the final time. This in itself could enhance states' revenue streams and creates jobs. Enterprising states -- those proud of their death penalty -- would be well disposed and positioned to offer incentives to develop this burgeoning "golden-years parachute" business. But maybe the essentials are already in place.
If you think about it, we've had a death panel all along. That's the group of concerned individuals who stepped up and took it upon themselves to try to make sure that we wouldn't have comprehensive health-care reform, now or for decades to come. If they had gotten their nay vote, they'd have "insured" that tens of thousands of Americans would continue to die every year for lack of health-care coverage and access.
Those dispensable souls were never plugged in in the first place. Now they will be put in the process; will we have lost a historic opportunity?
Gary Emmons is a Boston writer. For more stories visit scrippsnews.com
Must credit The Providence JournalComment

[red_Dragon888]

http://unlvrebelyell.com/2010/03/23/the-corporations-are-in-control/

The corporations are in control 
March 23, 2010 by Afan Tarar

Corporate banks are cashing in on people to their graves
Click image to enlarge.
The more I learn about the banking industry and corporate America, the more it disturbs me.

We are told that we are a society that believes in the rules of the free market, but the way lawmakers are allowing these firms to run has nothing to do with free market economics. It seems like anything goes.

One thing I learned that corporations do to make money is an insurance trick called “dead peasant” insurance. Dead peasant insurance is coverage that a company can take out on one of its workers.

It’s basically a life insurance policy that names your employer as the beneficiary, often without your consent.

When the insured worker dies, the company gets money for it. There is nothing inherently wrong with a life insurance policy, but the trick is that companies do not have to tell their workers that they are insured.

When you die, the corporation could collect and they do not even have to inform your family that they just earned money from your death.

Of course I cannot take an insurance claim out on anyone other than myself because if I do that, then I would have financial incentive in that person’s death and I would make profit from it. But apparently it’s OK for corporations to do that.

Another thing that corporations can do is take out insurance on other corporations. They would make money if the other corporation went under. One example: Goldman took out insurance on AIG, basically betting that AIG would fail. This is just another way businesses are making a quick buck.

One more thing that I was shocked to discover was a document made by Citi Group. Citi Group called this nation a plutonomy, in which wealth in mostly powered and consumed by the wealthy and highlighted how big the gap between the rich and the poor really is.

They spoke to length about how America was still surviving even though we have no savings and the value of the dollar is declining.

What these Harvard MBAs figured out was that because the rich control more than 58 percent of the nation’s wealth, and because their wealth is increasing, they do not need to save.

They can keep on spending because they make so much money.

Citi Group went on to talk about how this wealth was generated at the expense of labor. The ultimate conclusion was that the rich would continue to get richer but that this would cause some problems.

People with less wealth could stand in the way because as the rich get more wealth, we are left with even less.

“At some point it is likely that labor will fight back against the rising profit share of the rich and there will be a political back lash against the rising wealth of the rich.

This could be felt through higher taxation (on the rich or indirectly through higher corporate taxes/regulation) or through trying to protect indigenous laborers,” according to the Citi Group report.

It’s time to make those problems a reality. It’s time we regulate the industry that considers itself the new aristocracy and thinks that it can live off our tax dollars.

Congress will only take action if the people show their outrage. Otherwise, they will ignore the unjust situation because of its political ramification.

Corporations and free enterprise can have positive impacts but we need to make sure that the swindling and unethical business practices that corporate America has gotten into are stopped.

On one hand corporations say that they deserve equal rights as they are legal “human beings,” on the other hand they want special privileges because of their status.

It seems that America has fallen under corporate tyranny and we must resist. The big firms knew that the crash was coming but they wanted to make more money and their greed got the better of them.

We must keep regulate Wall Street and hold them accountable for their actions. A message needs to be sent from the “peasants” and this plutonomy must be taken down. This is not America: I refuse to be a peasant.

[red_Dragon888]

http://www.irishtimes.com/newspaper/finance/2010/0308/1224265792400.html

Taking a morbid approach to investment in workers

How would you feel if, in the event of your death, your employer got a payout? Michael Moore’s new documentary showcases an extraordinary workplace practice – but is it ethical? Does it happen here? asks FIONA REDDAN

DO YOU have a life assurance policy? No? Are you sure? Maybe you have one that you don’t know about, but it’s not your family that will reap the rewards in the event of your demise – no, it’s your employer. It’s something that may come as a surprise to many but, if practices outlined in Michael Moore’s new documentary are as widespread as believed, you may in fact be more valuable to your employer dead than alive.

Moore, the enfant terrible of US cinema, has chosen Wall Street as the target of his new documentary, Capitalism: A Love Story .

While his effort may already have been widely panned in the US, one distasteful practice it has brought to light is the use of so-called “dead peasant” insurance, whereby large corporations insure the lives of their employees and when they die, the companies gets a handsome payout.

The practice has been around for some time. Last February, the Wall Street Journal reported on a case where the widow of a former employee of Texas-based Amegy bank, Daniel Johnson, was suing the company to recover $1.6 million (€1.17 million) in death benefits which the bank received after her husband died in 2008.

Mrs Johnson discovered the existence of the insurance policy when a cheque for the full sum was sent to her – instead of the bank – by accident.

But what exactly is “dead peasant” insurance? Is it legal, and is it happening here?

Firstly, it’s important to distinguish the practice from straightforward corporate life assurance policies such as “key person insurance”, or corporate-owned life insurance (Coli), as it is known in the US, which is a commonly used tool taken out to protect a firm in the event of the death of a top executive.

Given the important role such a person might play in the firm, and the possibility that the viability of the company might be damaged if such a key person is injured or dies, this type of insurance offers some financial protection for a firm. Moreover, in these cases, the individual whose life was being insured would be aware that the policy was being taken out and would have to sign proposal forms.

On the other hand, one type of Coli, the so-called “dead peasant” or “dead janitor” insurance, is frequently used to take out life insurance on employees much further down the corporate ladder. In such cases the employer owns each policy, pays the premiums, and is the beneficiary named to receive the proceeds of the policy on an employee’s death. More sinister is the fact that the employee is often unaware of the existence of the policy.

Michael Myers of Houston law firm McClanahan, Myers and Espey, who appears in Moore’s movie, began representing the families of employees whose lives were covered by Coli in 1995, and has been involved in several high-profile class action cases, including Wal-Mart.

He says the term “janitor” is used because the insurance sometimes extends to employees as far as that level. While he asserts that “generally, you can’t buy insurance on a person’s life unless they sign something agreeing to it”, and that doing so is illegal in almost every state in the US, nonetheless “laws are violated frequently”.

As the policy runs until employees die, and death often takes place some time after a person has left a company, firms routinely check social security numbers to determine when someone dies in order to submit a claim.

Myers estimates that “several million people” are covered by such policies in the US, and the amounts for which they are insured vary quite substantially from employer to employer, but he has seen policies ranging from €50,000 to several million.

Why do they do it? As Myers says, “to make money”. The lump-sum earned by the company when an employee dies is tax free, while tax is also deferred on the investment, and the cover is used by many companies as a tax shelter.

Corporates defend using the technique on the grounds that employees generate significant costs over the term of their employment, particularly in the US, where health insurance is particularly expensive. Availing of such insurance, therefore, either with or without an employee’s consent, is simply a means of defraying the cost of providing such benefits, and it is commonly used to finance an employer’s obligation under a retiree health benefit plan. Moreover, firms can also borrow against the policy to fund benefits.

According to Myers, however, this explanation is a “nice, tidy rationalisation” and is “just not true”. “I’ve never, ever seen a situation where a company deposits funds into a separate account for this purpose. It goes straight into the general treasury, where it is co-mingled with the company’s other revenues,” he says.

Given the controversy the use of such life assurance products has generated in the past, the US authorities have tried to crack down on how they are used. For example, some states now prohibit policies which cover rank and file employees, so-called “dead peasant” insurance, while others require that companies either notify employees or that employees specifically consent to the Coli purchase. However, given that the new rules aren’t retroactive, the practice continues for policies taken out before the changes.

Such insurance obviously raises some very deep ethical issues. After all, there must be something wrong with your employer having an interest in your death. “A primary concern is that, as employers are generally responsible for workplace safety, it is an ethical issue for an employer to have a financial interest in the early death of an employee,” says Myers.

Dr Eleanor O’Higgins, a lecturer in business ethics at UCD, says the practice is totally at odds with respecting another person as a fellow human being. “If a company takes out life insurance on its employee, without that person’s agreement, it shows total disrespect to that other person. It’s the ultimate treatment of a person as a resource, not as a fellow human being,” she says. “It’s like the survival of the fittest; it shows a lack of moral and social responsibility.”

But before you start thinking that your employer wants you dead, you should know that the practice appears to be largely confined to the US.

“I’ve never seen anything that suggests to me that it goes on outside the US,” says Myers, although O’Higgins adds that, given how Ireland has adopted the Anglo-American form of capitalism, “it could happen here”.

According to a spokeswoman for Bank of Ireland Life, one of the largest players in the provision of corporate life assurance products in Ireland, the bancassurer does not offer any such products in the Irish marketplace. Instead, it provides a variety of other products, including personal and corporate shareholder protection, partnership insurance, and key-person insurance – aimed at protecting businesses.

In the case of disability, illness or death of a key employee or executive, a corporate does receive a payout if it has taken out one of the aforementioned insurance policies. This is used to ensure the future viability of the business – and the person whose life is being insured is fully aware that this is the case.

[red_Dragon888]

http://moneycentral.msn.com/content/insurance/p64954.asp

The Basics
Does your boss want you dead?

 
advertisement
 
 
'Dead peasants' insurance pays your employer a secret, tax-free windfall when you die. Insurers have sold millions of policies to companies such as Dow Chemical.

 By Liz Pulliam Weston

Right now, your company could have a life insurance policy on you that you know nothing about. When you die -- perhaps years after you leave your employer -- the tax-free proceeds from this policy wouldnt go to your family. The money would go to the company.

Whats more, the company might use this policy to pay for retirement benefits and other perks not for you or your fellow workers, but for your companys top executives.

Sound outrageous? Such corporate-owned life insurance is also big business:
Companies pay a whopping $8 billion in premiums each year for such coverage, according to the American Council of Life Insurers, a trade group.

The policies make up more than 20% of the all the life insurance sold each year.

Companies expect to reap more than $9 billion in tax breaks from these policies over the next five years. The policies are treated as whole life policies. So, companies can borrow against the policies (though the IRS won't let them write off the interest). And the death benefits are tax-free.
Hundreds of companies -- including Dow Chemical, Procter & Gamble, Wal-Mart, Walt Disney and Winn-Dixie -- have purchased this insurance on more than 6 million rank-and-file workers.$100? $200?
$300?
You can't save
if you don't shop around.

• Auto    • Health
• Home   • Life    
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MSN Money Insurance
 


These policies, nicknamed dead janitors or dead peasants insurance, soared in popularity after many states cleared the way for them in the 1980s. Congress recently tried to crack down on the practice, to the howls of the insurance industry -- which earlier this year managed to derail reforms.

The policies have generated lawsuits by survivors who got little or nothing when insured workers died. A couple of examples:
Jane St. John had two children and was pregnant with a third when her husband, a butcher at a Winn-Dixie store, was killed in an auto accident. When the Killeen, Texas, woman called the company to ask about insurance, she said she was told about a $17,500 policy to which she was entitled. St. John said Winn-Dixie told her nothing about the $102,000 the company collected from a corporate-owned policy on his life. She found out about it this summer, eight years after his death, from a lawyer who researched court records. The idea that the company would secretly insure lives, and then not share the benefits with the families, "is sick," she said. "That is creepy."

Mike Rice was a 48-year-old assistant manager when he died of a massive heart attack at the Wal-Mart store in Tilton, N.H. His widow, Vicki, became the lead plaintiff in a class-action lawsuit against the company after she discovered Wal-Mart collected $300,000 from a life insurance policy it owned on him. Vicki Rice believes job-related stress contributed to the heart attack and says it is totally immoral for Wal-Mart to profit from his death.
In a lot of circumstances, the families dont get anything, said attorney Mike Myers of Houstons McClanahan & Clearman, which represents survivors suing companies over corporate-owned policies. The company tries its hardest to keep the policy a secret.

Labor leaders and some lawmakers have denounced the policies as unjust and repulsive. The companies say profits from the policies can help offset the increased cost of employee benefits and enhance the businesses bottom lines.

Corporate-owned life insurance actually comes in two flavors:
Executive or key person policies that insure the lives of top executives. This coverage has been around for decades and has a clear business purpose, since losing the expertise, knowledge and contacts of top managers can be financially devastating for companies.

Broad-based or janitors policies that insure rank-and-file workers. Here the purpose is basically profit. The life insurance proceeds are tax-free. The policies have an investment component that allows companies to earn tax-deferred returns while the employee is still alive. And, of course, companies can take out tax-free loans on the policies. All these gains and income are used to fund operations, pay for executive compensation or boost other benefits.
No one knows how many corporate-owned policies are issued on executives versus rank-and-file workers. Wal-Mart alone had taken out about 350,000 such policies between 1993 and 1996. Nestle USA had policies on 18,000 workers in 2002, The Wall Street Journal reported. Enron had $500 million in policies on workers.

Sales of the policies came to a virtual standstill in September 2003, according to the insurer trade group ACLI, when the Senate Finance Committee approved legislation that would have taxed payouts made to companies if the employee had left more than a year earlier. That indicates that most policies arent being sold to protect companies financially against the loss of key current employees.

Strong insurance industry protests led the powerful committee to reconsider its action. Further work on the issue has been postponed until 2004, and indications are that the senators are softening on the idea of greatly restricting the policies, said Jack Dolan, ACLI spokesman.

Companies insist that janitors policies have a legitimate business function, but the IRS has been cracking down, arguing that many of the arrangements are nothing more than tax shelters. The agency has been particularly harsh on once-popular leveraged policies, in which policy loans were used to pay premiums. In the mid-1990s, the tax agency began disallowing billions of dollars in interest payment deductions the companies had been taking on such loans. Companies efforts to defend their programs have been largely unsuccessful; a U.S. Tax Court judge called Winn-Dixies program a sham, saying it lacked economic substance and business purpose.

The controversy helped convince Walt Disney and Wal-Mart, among others, to drop the policies. Winn-Dixie battled the IRS in court, but the supermarket chain recently lost its final round when the Supreme Court refused to review a lower court decision that backed the IRS.

So far, one company has prevailed against the IRS -- Dow Chemical, which took out the policies on more than 21,000 workers. A U.S. District Court in the Eastern District of Michigan ordered the IRS to return $22.2 million plus interest to the company. The IRS has appealed the ruling.

Survivors lawsuits, meanwhile, typically focus on two issues:
Whether the companies had an insurable interest in their employees lives.

Whether the companies were required to get the employees permission for the policies.
Insurable interest is usually a big deal for insurers. They want to make sure whoever is buying life insurance doesnt have an incentive for bumping off the insured. Insurers usually require purchasers have a strong familial or emotional connection to the people being insured, or that they would suffer significant financial losses if the insured people died.

(Its that latter standard that was loosened in the 1980s, making it easier for companies to buy policies for all their employees, not just key executives.)

Most states also have advise and consent laws that technically require companies to get workers permission before buying life insurance on them. But attorney Myers said many businesses circumvent these laws by purchasing the insurance in one of the states that doesnt require notice or consent, including Delaware, Georgia, New Jersey, North Carolina, Pennsylvania and Vermont.

"Executives fly to Atlanta to meet with the insurance company and its brokers, sign some papers, get on their respective corporate jets and fly home, Myers said.

Other companies offered their workers small policies -- typically $5,000 to $10,000 -- as an incentive to allow larger corporate-owned policies to be issued on the workers lives. The small policies can later be canceled, even if the company keeps up the premiums on the other insurance.

Anger about these practices likely will keep the heat on Congress to make some reforms. Its possible that lawmakers will restrict severely companies ability to write the policies on rank-and-file workers. At the very least, companies probably will have to get workers consent before buying any new policies and clearly disclose that the coverage may extend past the time they leave the company, the ACLIs Dolan said.

But he rejected the idea that corporate-owned life insurance was immoral or a company bet against its workers.

Its an important business planning tool, Dolan said. Companies are using it for extremely valid reasons.

Liz Pulliam Weston's column appears every Monday and Thursday, exclusively on MSN Money. She also answers reader questions in the Your Money message board.

[MitchMiller]

Another thing that's begun to occur related to life insurance - swaps and securitization on life insurance policies.  Heaven help us if there is a killer pandemic.  That alone would be enough to cause financial difficulty without the toppling of a pyramid of massive bets that just can't go bad (sound familiar?).

----
http://www.elliscountyobserver.com/?p=8601
----
It didn’t take long for Wall Street barons to conjure up some other scheme that will probably result in another financial disaster…

    Rolling the Dice Again

    By Ralph Nader
    Nader.org

    The Wall Street gang is at it again! It’s been one year since Wall Street’s collapse and bailout took trillions from taxpayers and the sinking economy. The speculative instruments that pulled down the economy were those super-risky sub-prime mortgages, credit default swaps, collaterized debt obligations—you know—Las Vegas East, using other peoples’ savings.

    As if to elaborate their gigantic con job, the investment banks, guaranteed by you the taxpayers, are now packaging life insurances policies in what sane, on the ground businesses would consider deranged exotic money plays.

    Here is how the New York Times described the new securitization packages emerging from such corporate welfare goliaths as Goldman Sachs, Credit Suisse and their eager rating agency, DBRS.

    “The bankers plan to buy ‘life settlements,’ life insurance policies that ill and elderly people sell for cash–…depending on the life expectancy of the insured person. Then they plan to ‘securitize’ these policies…by packaging hundred or thousands together into bonds. They will then resell these bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die.

    “The earlier the policy holder dies, the bigger the return—though if people live longer than expected, investors could get poor returns or even lose money.”

    Continuing its lead front page story last Sunday, the Times describes Wall Street as “racing ahead for a simple reason: with $26 trillion of life insurance policies in force in the United States, the market could be huge.”

    The Insurance Information Institute’s chief economist was not impressed. Speaking for the life insurance business, he said: “It’s not an investment product, [it’s] a gambling product.”

    The wild and crazy derivative spree is about to inject a new and recklessly ghoulish game of chance into the financial industry. The Wall Street casino boys are already drooling over the huge fees they expect to collect. Whatever wreckage occurs down the road will soak the investors. Washington, standby for another bailout!

    If this sounds alarming, consider the fact that Congress has not even reported out of any House or Senate Committee any regulatory authority for the giant derivatives businesses that places bets on bets on bets in very complex financial instruments.

    Trillions of lost dollars, destabilization of the economy, depletion of pension funds and college endowments—to name some affects—and Washington is still in stasis, sitting on its cushions of corporate campaign cash and consorting with industry lobbyists who want nothing done.

    Still, you the taxpayers are on the hook for another round with these corporate delinquents and gamblers!

    The only difference is that this time the insurance industry seems ready to fight. It does not want to be tarred with what one executive called “the brush of subprime life insurance settlements.”

    If so, my advice to insurance companies is to nip this in the bud by going to Capitol Hill. This madness will not be stopped by scattered state insurance commissioners.

    With all the unmet needs for productive capital, the masters of the financial universe prefer making money from money through high velocity paper speculation, instead of financing real capital structures strengthening communities around the country.

    To be sure, abstract derivatives are where the huge commissions and gigantic executive pay packages flourish. It is the arena where investment banks play blackjack. Heads they win, tails you lose.

    But why do people have to pay 5,6,7 percent sales taxes in stores, but the derivative dealers on Wall Street pay no sales tax on hundreds of trillions of transactions every year? Seems like a hefty double standard, which is why Cong. Peter DeFazio (Dem. Oregon) has introduced legislation to tax such speculation. (HR 1068)

    In addition, Congress needs to get going and regulate these derivatives and finally repeal Clinton-era and Bush-era laws that gave them a free ride.

    Finally, there needs to be a prohibition on investments in such risky instruments by fiduciary institutions. And, standards of prudence have to be reinstated. Old time bankers and pensions managers would understand such reforms. Investor rights to sue these investment firms and rating agencies for deception and fraud are weak and require strengthening.

    Someday, our society needs to decide how to increase peoples’ control over their own money and establish incentives that can attract capital flows to where they can be productive. At present, perverse incentives are reflecting sheer speculative power and are promoting grotesque uses of money.

    Let these casinos and their gamblers on Wall Street do what they want with their own money, but don’t let them gamble with other peoples’ money.

[red_Dragon888]

http://www.democraticunderground.org/discuss/duboard.php?az=show_mesg&forum=389&topic_id=8102897&mesg_id=8102897

What would happen if we found out Massey had taken out "dead peasant insurance" on the WV miners?

[red_Dragon888]

Dying Peasant

http://femmefare.blogspot.com/2010/04/dying-peasant.html
 
Since I started working full time, I've been trying to make sense of the insanity I experience five days a week -- the rambling conference calls, Frankenstein collaborations, undermining BCCs, patronizing training requirements, and on and on, and on. What is the point of all the seemingly institutionalized spinning of wheels? Wouldn't we all be more productive if we were treated like self-sufficient adults? But then last week, with the help of some Netflixed Michael Moore, I think I figured it out.

It's not a joke. Corporations have a vested interest in driving us crazy; they are consciously trying to suck our souls dry of any and all will to live. Well, maybe not all corporations -- just the ones that have "Dead Peasants" insurance. According to Moore's Capitalism: A Love Story and several other sources, these corporate-owned life insurance policies were originally created to protect companies from the financial loss and disruption they might experience with the death of a top executive (of course then they were called "key man" or "key person" insurance). Then some evil suit figured out how to manipulate the practice to profit (tax free!) off of lower-level employees, you know -- "peasants." And apparently, young females are lower risk and therefore higher profit than other demographics -- when dead. Eep. I better watch my back.

[red_Dragon888]

Term Life Insurance Agencies In England. Life Insurance Transfer. Sbi Life Insurance Ppt. Roel Liberty Life Insurance Company

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[red_Dragon888]

The Case Against Massey Builds

http://discuss.epluribusmedia.net/content/case-against-massey-builds

"I am shock by the youtube video."

[red_Dragon888]

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4337458

Massey Energy Bought Workers Comp Insurance Coverage Shortly Before Mine Explosion

Source: After Downing Street


Massey Energy Bought Workers Comp Insurance Coverage Shortly Before Mine Explosion
Submitted by dlindorff on Fri, 2010-04-09 12:02.

By Dave Lindorff

Massey Energy Corp., owner of the Upper Big Branch Mine in West Virginia where at least 25 miners were killed April 5 in a methane gas explosion, apparently arranged for and purchased disability compensation insurance coverage only a month before the disaster, according to one source with inside knowledge about the company’s risk management operations.

Prior to that, the company, known for its aggressive challenges to workers’ comp claims, was self-insured for workers compensation.

But given the number of safety violations at its mines--there were 53 in March alone, 495 in 2009 and 1300 since 2005, at just the Upper Big Branch Mine and 2,074 over the past year at other mines owned by Massey across the Appalachian region--perhaps the money spent buying insurance to cover workers’ injury claims might have been better spent fixing chronic problems with methane gas build-ups in the mine. Then again, maybe the company felt that violation citations were no big deal--it has reportedly challenged two out of three instead of fixing them as a matter of course.

The company certainly has not shown particularly good judgement when it comes to its insurance decisions. Last year, despite noting in its annual report that its operations were “subject to certain events and conditions that could disrupt operations, including fires and explosions,” Massey Energy decided not to purchase business interruption insurance, according to Business Week magazine. With some analysts suggesting that the accident at the big West Virginia mine, where metalurgical coal used in the production of steel is extracted, could lead to a shutdown of that mine, and to a nearly 50% loss in overall corporate earnings this year, that decision could prove costly to Massey investors. The ratings agency Standard & Poors earlier this week placed the company, which already sports a junk-bond-level BB- credit rating, on watch for a downgrade, citing lost production, the “workers’ compensation liability and any impact potential lawsuits brought against the company may have.”

[red_Dragon888]

http://www.insurancerate.com/corporate-owned-life-insurance-policies.php

Your Company Could Stand to Make Millions from Your Death
Published: Fri 16 Apr 2010

Wendy Blair

Just when you thought corporate America couldn't get any seedier or greedier, another despicable business practice comes to light-"janitor insurance." Janitor insurance, also called dead peasant insurance, is a company-purchased life insurance policy on a relatively unimportant employee. Companies take out these policies on low-level employees simply because the worker is worth more to them dead than alive. In most cases, the employee has no idea the company has taken out a life insurance policy, as disclosure is not mandated by law.

When the worker dies, the company collects the proceeds of the policy tax-free. Although clerks, secretaries, and janitors may not have offered much monetary value to the corporation when alive, they provide a windfall of tax-free income when dead and well-insured. Of course, the dependents of the decedent will not see a dime of the corporate-owned life insurance (COLI) policy. But you can bet the farm that the proceeds of the policy will help pad the pockets of the fat-cat executives at the top.

COLI Benefits: Why You Could Be Worth More Dead
So exactly how profitable and common is COLI? The practice is nearly ubiquitous among major corporations and banks, and the profits are off the charts. The worker and his/her family benefit in no way from COLI, but corporations make out like bandits. Here are just a few of the benefits of taking out janitor's insurance:

•The death benefit of the policy on the worker is collected tax-free


•Life insurance policies provide a tax-free investment as their values increase


•The future death benefit is an appealing off-balance-sheet asset


•Prior to 1996, companies could take out loans against COLI policies and deduct the interest on their taxes


•Companies are not required to reveal how they use the money once the death benefit is disbursed
Legality and Ethics: How Can This Be Legal?
Although morally reprehensible, the practice of taking out janitor's insurance is perfectly legal. Previously, the law prohibited companies from purchasing life insurance policies on low-level employees because no "insurable interest" existed, meaning the companies would not suffer any financial hardship if the employee died. During the 1980s, however, the rules changed, and the practice became rampant.

Now corporations regard COLI as an informal pension fund for their top executives instead of an objectionable way of capitalizing on death. Essentially, COLI is a twisted pyramid scheme that exploits the deaths of the working class to bankroll already-obscene executive bonuses. And the dead worker probably did not even know of the policy, which may be for the best. At least then his loved ones can avoid the pain and indignation of realizing the loss of their father, son, or brother helped pay for a VP's ski weekend in Vail, a CFO's six-figure Jaguar, or a CEO's Learjet.

[red_Dragon888]

Your morning jolt: NAACP rescinds endorsement of anti-abortion bill

http://blogs.ajc.com/political-insider-jim-galloway/2010/04/26/your-morning-jolt-naacp-rescinds-endorsement-of-anti-abortion-bill/

but the main point is:

Late last week, the Georgia State Retirees Association told members that it had picked up signs of a last-minute effort to permit public pension systems to take out “dead peasant” life insurance policies on participants.

The original bill was HB 1380. One possibility for attachment, the GSRA said, is HB 305.

“Dead peasant” insurance policies are taken out by the pension fund on those who contribute to pension systems. The beneficiary is the pension system itself – not the family of the dead peasant/worker.

[red_Dragon888]

Are you worth more to your employer … DEAD or ALIVE?

http://www.gastongazette.com/news/paid-46383-insurance-dead.html

Are you worth more to your employer … DEAD or ALIVE?
 
Daniel Jackson
Many businesses offer company-paid life insurance to their employees as part of their overall benefits package, but the beneficiary on some of these policies is not the employee or their family — it’s the company.

And in some cases, the employee doesn't even know about the policy.

Several years ago, Charlotte-based Ruddick Corp. had corporate-owned life insurance, also called COLI, on all of its employees, said Fred Jackson, president of American & Efird, a Mount Holly-based Ruddick subsidiary. But there were some complaints about the policies, Jackson said.

Today, Ruddick still has COLI policies on key executives, which is disclosed in the company’s annual reports to the Securities and Exchange Commission, but the company doesn’t own policies on everybody, Jackson said. COLI policies allow companies to profit from the death of employees, sometimes after the employee leaves the company. They say the proceeds of those insurance payouts help finance retirement plans for those former execs who are still living.

“Most companies have some form of life insurance on key employees,” Jackson said, “but blanket policies that cover everybody down to the janitors — that has nothing to do with us.”

According to New York Life Insurance Co., industry surveys from 2007 reported that 75 percent of the Fortune 1000 companies finance retirement plans for their senior executives with COLI policies and 43 of the 50 top U.S. banks and thrift institutions have implemented COLI programs. The policies protect the company from losses associated with the death of a key executive.

Nivens: COLI policies pay for benefits

Ernie Nivens, of Nivens & Associates in Gastonia and a registered agent of New York Life Insurance Co., said the COLI policies originated in the 1980s and are still marketed aggressively today. The policies are a great way for a company to finance health plans, retirement plans and other benefits provided to employees, he said.

"That's a tremendous liability that a company would have providing retirement benefits to employees with no way to fund it," Nivens said. "So, COLI (policies) provide an avenue to fund that unfunded liability."

But the COLI policies, known to critics as “dead peasant insurance,” have come under fire and been the subject of many lawsuits over the years, especially in cases where companies insured rank-and-file employees without their consent and without their knowledge. Critics say it is wrong for a company to have a profitable interest in the death of an employee.

Ruddick Corp. is listed at www.DeadPeasantInsurance.com as one of 213 companies believed to have been named as beneficiary on a COLI policy. The list includes many well-known companies, including Wal-Mart, Bank of America, Wells Fargo, Hershey, Panera Bread, Marriott, Winn Dixie and Media General.

Mike Myers, a Houston-based attorney who maintains the Web site, said he compiled the list of companies over several years, gathering information from court documents and SEC filings. For the average employee, it can be difficult to find out if their employers are beneficiaries of COLI policies, Myers said. And there’s not much they could do about it anyway, Myer said.

“The question I'm asked the most is, 'How do we find out,' and my answer is, ‘Good luck,’” Myers said.

 Myers: Dead peasant insurance is ‘poor policy’

According to Myers, the term “dead peasant insurance" allegedly comes from an insurance brokerage firm that placed COLI policies purchased by Winn Dixie on 36,000 employees without employee consent. Two memos prepared by the brokerage firm made public in the record of the Eleventh Circuit of the U.S. Appeals Court described the deceased employees as “Dead Peasants,” Myers says.

Myers has been interviewed by CNN and the Wall Street Journal and he recently appeared in documentary-maker Michael Moore’s film “Capitalism: A Love Story.” Myers said some companies rationalize COLI policies as a way to cover the cost of employee benefits, but the death benefits almost always go into a corporation’s general treasury just like any other revenue.

"There's no difference between profits off of a dead cashier and regular sales," Myers said. "If a company is providing health insurance, it's really poor public policy for them to have a financial interest in the early death of employees. And the amount the company gets may be several times the employee's annual salary."

Basically, a COLI policy is just like any other whole life insurance policy. Nivens said whole life insurance is the best in the industry and the best tax shelter in the country. A whole life policy has a cash value that builds in it, unlike term life insurance. That value grows tax deferred.

"The cash value can be tapped tax free if needed," Nivens said. And "the death benefits are tax free death benefits."

But a company or an individual can't take out a life insurance policy on anybody, Nivens said. There has to be an "insurable interest." For instance, it’s unlawful to place fire insurance on your neighbor's house. By law, a company has an insurable interest in its employees, Nivens said, but cannot place COLI insurance on a contract worker.

2006 law requires employee consent

Nivens said he is required by law to get an employee's consent before he sells a COLI policy to their employer. In 20 years, Nivens said he's sold hundreds of COLI policies. Nivens said he meets with every employee. "I witness them sign the consent letter," he said.

At that time, Nivens said he also encourages employees to discuss the policy with their loved ones. Nivens said he's never had a COLI policy result in litigation, but in those cases, the employee usually forgets to tell their loved ones about the policy.

"They don’t think to tell family about it," Nivens said. "Then they die. The family finds out the death benefit was $100,000 and they feel cheated. They never understood or were informed of its purpose at the onset."

The COLI Best Practices Provision of the Pension Protection Act of 2006 an insured employee must be informed in writing and provide written consent before the policy is issued. Before the employer can receive COLI death benefits tax free, the 2006 law requires that the insured was an employee within 12 months preceding death or that the insured was a highly-compensated director or executive manager.

Prior to 2006, Myers said there was no federal law requiring company's to disclose information about COLI policies to employees. Some states required disclosure before 2006, but those laws were often ignored, Myers said.

"People start to push the edges of ethics and legality when they try to max every penny and sometimes you cross a line," Myers said. "In places where employees aren’t told, it probably crosses a line.”

 

 

[red_Dragon888]

http://www.publicbroadcasting.net/kuar/news.newsmain/article/0/0/1647156/Arkansas.Headlines/Walmart.Sued.For.Collecting.Life.Insurance.on.Employees

Walmart Sued For Collecting Life Insurance on Employees
 
James Call (2010-05-07)

null
TALLAHASSEE, FL (wfsu) - The Florida Supreme Court is deciding whether Walmart widowers can sue the corporation for a share of the life insurance policies Walmart purchased in their wives' names. They want some of the $9.6-million the corporation collected when the insurance benefits were paid.

Walmart got the money when 132 Florida employees enrolled in a corporate-owned life insurance program died. When a company names itself a beneficiary on a policy bought in the name of a rank and file employee, it is known as Dead Peasants Insurance. Walmart stopped the practice in 2000, saying it was losing money. In the case before the Florida Supreme Court, a federal judge is asking the court to decide at the time the policies were purchased whether Florida law provided family members standing -- the right to sue to claim the life insurance money.

Eileen Moss represents Walmart. It has paid more than $15-million to settle class action dead peasant suits in Texas and Oklahoma, but in Florida, she argued the law is on Walmart's side.

"You have to have standing. They were not parties to the contract, and they weren't harmed by it. They didn't pay the premiums, and so the decision was made no standing. Now, where they started creating standing was through statutory rights."

Moss argued the Florida Legislature in 2008 gave families the right to sue, standing. New rights cannot be applied retroactively. The estates of Rita Atkinson and Karen Armatrout see it differently. They argued that two years ago lawmakers clarified Florida law, and the rights were already there.

Michael Myers represents Atkinson, Armatrout, and others. He points to the case of a Port St. Lucie banker. Seventy-three years ago his estate argued all the way to the Supreme Court that it had a legal claim on the life insurance money.

"I think the importance of that case is a bank president's family had the right to sue. So if a bank executive's family had the right to sue in 1937, why wouldn't the families of pharmacy workers and administrative people in the office have the right to sue in 2010?"

That case is McMullen, and Moss argued Myers is misreading it. She said McMullen did not decide standing. Therefore, prior to 2008 the only remedy available would be to declare the policies void. Her remarks drew these comments from Justice Barbara Pariente.

"I would have agreed with you that I thought the only remedy was to be able to void a policy. But I don't think McMullen can be dispensed with as simply in terms of that this court was saying, certainly didn't say they didn't have standing and certainly didn't say that they wouldn't have that cause of action. They wouldn't adjudicate the dispute if those thresholds to findings were contrary."

The silence in the courtroom was the opening through which Myers drove home his point. Precedence was established in 1937.

"The only difference is that was the estate of a key person who sued. Here we have the estate of rank and file employees. If these insured's have standing to sue, then the seamless web of the law works perfectly. McMullen was correct. Gerstell was correct. List versus List with the living person was correct. The Legislature was correct when it said it was only clarifying the existing law. The dictionary definition of clarify is just to make clear, easy to understand, it doesn't add anything. This seamless web of the law is seamless. Public policy is promoted."

In court filings, Walmart says the amounts of payouts on the 132 Florida employee policies ranged from 55 to 90-thousand dollars. It said the program was intended to help pay rising employee healthcare costs. It didn't work out and was cancelled in 2000. Surviving family members, like Armatrout and Atkinson, want a share of the $9.6-million Walmart collected on employee life insurance policies. But first, the Florida Supreme Court has to decide if they have standing, that is, the right to sue.

© Copyright 2010, wfsu

[red_Dragon888]

http://c4ss.org/content/2446

Sympathy for the Devil, BP
Posted by Kevin Carson on May 12, 2010 in Feature Articles • 16 comments
Let none say that Lew Rockwell is a stereotypical right-winger.  As ever, his heart bleeds for those poor souls who would meet with nothing but condemnation from the more hard-hearted and judgmental among us.  For example, he finds it within him to sympathize with the suffering of poor BP, the real victim in the recent oil spill disaster.  Even though BP is the “leading victim,” Lew has “yet to see a single expression of sadness for the company and its losses.”  In fact, “the words of disgust for BP are beyond belief”!

Oh, the humanity!  Why, after all it’s losing thousands of barrels of oil a day (seriously, folks, that’s what he said–and the kid who murdered his parents is an orphan!).  Their stock is declining in value.  And eleven of their employees were killed.  Besides, the environmentalists are ecstatic over the chance to blame someone, so we know BP must be on the side of the angels.

Honestly, any day now I expect to see a piece at LRC or Mises.org boo-hooing because Monty Burns got a scratch on his paint job running over a worker in the street with his Bentley.

So if I did something stupid to injure or kill myself,  and in the process also did billions of dollars worth of damage to other people’s property, I’m entitled to sympathy?  I’m wracking my brain trying to think of a parallel case involving anyone besides rich people or a corporation, where Rockwell wouldn’t be screaming about “cultures of entitlement” and “victimology.”

So what if they’ve hurt themselves?  They did it through their own negligence.  I’m waiting for Lew to shed tears for all the poor people living in misery they brought on themselves.  Crickets chirping.

Considering that the economic and environmental damage will probably amount to hundreds of billions of dollars, and that BP’s liability is capped by law at the amount of direct cleanup costs plus $75 million, their senior executives should be rejoicing that the entire company hasn’t already been liquidated.

As for those eleven workers who died, why exactly is that supposed to be a tragedy for BP?  BP probably had dead peasant insurance on them from the same company where Massey Coal had its policy.

By the way, I can’t let this kind of sheer, breathtaking stupidity get by unchallenged:  “The abstraction called the ‘ecosystem’ … has done far less for us than the oil industry, and the factories, planes, trains, and automobiles it fuels.”

Um, it seems to me that the evolution of life itself, the existence of an atmosphere of breathable oxygen, the existence of a food chain capable of supporting hominids long enough for them to become the dominant species and invent those factories and cars–all of this stuff falls pretty clearly under the heading of “ecosystem.”

Is there a bit of a disconnect here?  Someone from a philosophical tradition that stresses all the Hayekian knowledge problems involved in central planning, arrogantly claiming that a handful of hierarchical organizations directed by human central planners sitting behind desks have done more for us than the complex unplanned system responsible for bringing us and the entire biosphere into existence?

Burke is often quoted against the hubris of social engineers and central planners:  “An ignorant man who is not fool enough to meddle with his clock, is however sufficiently confident to think he can safely take to pieces, and put together at his pleasure, a moral machine of another guise, importance and complexity, composed of far other wheels, and springs, and balances, and counteracting and co-operating powers.”   What about those fool enough to do the same, not to society, but to the entire biosphere?

Let’s get something straight.  BP did hundreds of billions of dollars worth of damage to other people and their property, and the government–the government which Rockwell says “treats every capitalist producer as a bird to be plucked”–is protecting it from tort damages over and above about a tenth of a percent of the actual economic harm it did.  Sounds to me like BP did some plucking of its own.

C4SS Research Associate Kevin Carson is a contemporary mutualist author and individualist anarchist whose written work includes Studies in Mutualist Political Economy and Organization Theory: An Individualist Anarchist Perspective, both of which are freely available online. Carson has also written for such print publications as The Freeman: Ideas on Liberty and a variety of internet-based journals and blogs, including Just Things, The Art of the Possible, the P2P Foundation and his own Mutualist Blog.