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NY AG Andrew Cuomo attacks life insurers for following their contract terms

New York Attorney General Andrew Cuomo is running for governor. He hopes to succeed where CA Insurance Commissioner John Garamendi failed, by riding a populist tide of anti-life-insurance-company sentiment on to electoral victory.

It's not often that my day job crosses paths with my blog life. But I was there in the early-90's when Garamendi single-handledly destroyed Executive Life and wiped out billions of dollars worth of policyholder and shareholder value for purely partisan political purposes.

Now Andrew Cuomo has mounted his high horse proclaiming that major life insurers like Prudential and Met Life are ripping off policy beneficiaries. How? By paying them the contractually specified rate of interest on the death benefit proceeds.

Ah, but according to Cuomo the dastardly insurance comnpanies are actually earning more than the typical 3% interest they are contractually obligated to pay. Stop the presses! A company in the business of making money is, wait for it, making money!

Every life insurance contract spells out in excruciating detail all the minute details which apply to the policy. This includes the "credited interest rate on death benefit proceeds". When you sign the contract, you agree to these terms.

But channeling his best Elizabeth Warren impression, Andrew Cuomo has decided New Yorkers are too stupid to understand the written life insurance contract. Ergo it's his job, as protector of the populist tide, to sue the life insurance industry into compliance with his manufactured notion of "fairness".

It's utter rubbish. John Garamendi put thousands of people out of work and wiped out many more thousands of nest eggs in his ultimately unsuccessful quest to rule California with his populist iron fist. I don't know if Andrew Cuomo is destined to be the Empire State's next governor. But I can assure you that his misguided attack on the life insurance industry will leave nothing but destruction and misfortune in its wake.

When Garamendi's meddling forced Executive Life into receivership he hurt "the little people" the most. The policyholders were wiped out, their cash values settled for pennies on the dollar. Clearly his "victory" was pyrrhic, yet he trumpeted its "success". Fortunately, the voters saw through his obsfuscation.

I imagine the voters of New York are equally savvy, and they'll find Andrew Cuomo to be a disingenuous panderer rather than a protector of the people's interest. And I pray that he doesn't flush Prudential or Met Life into the same black hole of political ambition to which John Garamendi consigned Executive Life.

Posted at 22:08 by Chris Wysocki   [/democrats]   | Trackback | Perm Link |
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