Veterans' Insurance Disclosure Rules for Death Benefits Approved by House
The U.S. House passed legislation that would set new disclosure rules for life-insurance companies that provide death benefits to veterans.
Prudential Financial Inc., which provides life insurance for the military under a contract with the Department of Veterans Affairs, pays death benefits for fallen soldiers by opening accounts that their families can draw against. The insurer pays lower interest rates on these accounts than it earns with the money and provides checkbook-like drafts which aren’t guaranteed by the Federal Deposit Insurance Corp., Bloomberg Markets reported on July 28.
The legislation would require insurers to tell beneficiaries how the money will be invested and provide additional financial counseling. Prudential and the VA maintain that this has provided families a safe place for their money while they decide what to do with it. The company and the agency say they already are providing counseling.
“We need to put our survivors first and provide them transparency and disclosure as quickly as possible,” said bill sponsor Representative Debbie Halvorson, an Illinois Democrat.
The House voted 358-66 for the measure, which now goes to the Senate. The bill is H.R. 5993.
To contact the reporter on this story: Lisa Lerer in Washington at llerer@bloomberg.net.
To contact the editor responsible for this story: Mark Silva at msilva@bloomberg.net
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