Message #9142

[FooFa]

For a decade, until the contract was formally changed, Prudential wasn’t fulfilling its obligations to survivors of fallen service members, says Brendan Bridgeland, an insurance lawyer who runs the non-profit Center for Insurance Research in Cambridge, Massachusetts.

‘Violated Terms’

“It’s very clear they violated the original terms of the contract,” says Bridgeland, who is retained by the National Association of Insurance Commissioners to represent consumers.

“Every veteran I’ve spoken with is appalled at the brazen war profiteering by Prudential,” says Paul Sullivan, who served in the 1991 Gulf War as an Army cavalry scout and is now executive director of Veterans for Common Sense, a nonprofit advocacy group based in Washington. “Now vets are upset at the VA’s inability to stop Prudential’s bad behavior.”

That the VA allowed Prudential to issue retained-asset accounts for 10 years while the contract required lump-sum payouts is “more evidence that the VA was asleep at the wheel for a decade,” says Sullivan, who was a project manager and analyst at the VA from 2000 to 2006.

“When grieving families check the box that they want a lump sum, they should get it. We remain disappointed and irate at the VA’s failure to provide advocacy for veterans,” he says.
State and U.S. Probes
Since July 28, when Bloomberg Markets first reported that Prudential sent checkbooks instead of checks to survivors requesting lump-sum payouts, state and federal officials have demanded the retained-asset system be investigated and reformed. The VA itself launched a probe of its life insurance program the day the first story was published.

The next day, New York Attorney General Andrew Cuomo launched what he called a “major fraud investigation” of Prudential and other life insurers over their use of retained- asset accounts. Since then, Cuomo’s office has issued subpoenas to Prudential and at least 12 more insurance companies.