Defense Base Act Compensation Blog

The Modern Day DBA Casualty

Veterans Agency Made Secret Deal Over Benefits

Posted by defensebaseactcomp on September 14, 2010

Bloomberg

The U.S. Department of Veterans Affairs failed to inform 6 million soldiers and their families of an agreement enabling Prudential Financial Inc. to withhold lump-sum payments of life insurance benefits for survivors of fallen service members, according to records made public through a Freedom of Information request.

The amendment to Prudential’s contract is the first document to show how VA officials sanctioned a payment practice that has spurred investigations by lawmakers and regulators. Since 1999, Prudential has used so-called retained-asset accounts, which allow the company to withhold lump sum payments due to survivors and earn investment income on the money for itself.

The Sept. 1, 2009, amendment to Prudential’s contract with the VA ratified another unpublicized deal that had been struck between the insurer and the government 10 years earlier — one that was never put into writing, Bloomberg Markets magazine reports in its November issue. This verbal agreement in 1999 provoked concern among top insurance officials of the agency, the documents released in the FOIA request show.

Read the entire article here

3 Responses to “Veterans Agency Made Secret Deal Over Benefits”

  1. brit guy said

    What an insurance company and government agency doing some underhand behind closed door deal to benefit the insurance company and not the insured.

    Never dont believe it.

    This could never happen in the USA or the free western world.

    What I find staggering is that your companies treat people like this then wonder why somebody wants to give you a bloody nose.

    If you treat people badly they will react badly

  2. Superman said

    No suprise, but what i am suprised about that they did not use AIG or CNA since they have been so good at committing fraud.

  3. […] Veterans Agency Made Secret Deal Over Benefits […]

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