Banks Use Life Insurance To Pay Bonuses

Wall Street Journal:

Banks are using a little-known tactic to help pay bonuses, deferred pay and pensions they owe executives: They're holding life-insurance policies on hundreds of thousands of their workers, with themselves as the beneficiaries.

Read the whole story: Wall Street Journal

Comments

[bulfinch]

Banks have been doing this forever. In banking it is called BOLI. Bank owned life insurance.

[KewlJoJo]

Why is Max Bob still in America? For that matter, why is Max Bob?

[KewlJoJo]

MushBoob is in rare form today. Delivering absurd comments with a machine like delivery.

[KewlJoJo]

Took so long for that one to come up I forgot I posted it.

[NWRICK]

Happens to me all the time. :-)

[JustMe133]

How the he11 are they allowed to do this? This is dispicable! So I can put myself on someones life insurance as beneficiary and get away with it? Are you kidding me! These people need to all be locked up!!

[wgsalter]

No, you've completely misunderstood. You, as an employee, may or may not sign up for life insurance that you pay for and own, and therefore control ALL of the benefits. THIS IS SOMETHING ELSE, where the company HAS TO ASK FOR YOUR PERMISSION to establish a separate policy, owned and paid for by the company, where the company is the beneficiary if the employee dies. They are not mutually exclusive - they're unrelated, and in no sense has some third party put themselves on YOUR life insurance policy.

[allieq]

However, it states in the article:

"Efforts to rein in the practice largely have been unsuccessful, including the most recent rules Congress enacted in 2006. The rules limit companies to buying life insurance to just the top third of earners, who must provide consent. But the rules don't apply to life-insurance that employers bought before the August 2006 rules, which cover millions of current and former employees.­"

Soooo, prior to August of 2006, permission WAS NOT required by the employees and it was NOT restricted to so called "key employees" who are top earners. So, yes, Wachovia Bank or Bank of America, or whomever..­.prior to August 2006...cou­ld take out a life insurance policy on Tanya Teller and collect when she dies. Period. Tanya Teller never knows about it, nor does her family...a­nd the bank or whatever corporation makes their claim and collects their check.

[blueken]

I'm no fan of banks, but I'm pretty sure you can't insure someones life without thier signature.

[allieq]

Wish that were the case..but it's not.

[enoughalready13]

People, this system is on the pricipice of complete collapse. The current Administration, while trying very hard to fix Bush's mess, can only do so much. The damage has been done and it's not reversible. Trying to rein in Wall Street that has been roaming free with abandon for decades is like now trying to catch and tame an over-populated herd of lions in the wild. It's never going to happen.

[NWRICK]

It sounds like you are ready to give up.
That, my friend, is NOT an option.

[pewty]

Ditto. I believe our beloved President is watching these jackels with his usual cool and calm approach. Hopefully this will be addressed.

[Tena]

I wish someone could explain to me why this is legal. It shouldn't be. I have an instinctive distrust and dislike for this - no one should be able to take a life insurance poliicy out on my life unless I say that's ok.

It's my life, dammit. I hate this - this is obscene to me that they are doing this.

[only1Demvoter]

Tena : Remember NOLA...

Insurance companies and ' principles ' don't go together, anymore than bankers and principles do...

( Agree with you that " permission " ought to be mandatory / required, for those Policies. )


-ralph

[proudthinker]

while, especially talking about NOLA, I agree with you, let us remember that there are a "few" companies out there that do right for their customers. I can think of a particular life insurance company who flew underwriters to New York City on 9/12/01 and wrote checks to beneficiaries, without even asking for a death certificate. They made that decision as soon as the second plane hit. Waived war exclusions and all.
SOME companies get it. But that's how they stick around for hundreds of years and still have high ratings...

[wgsalter]

Your consent is required by law.

[Give Peace A Chance]

If you don't give consent, you get fired.

[TiffanyHusseinBanned]

MaxBob,

Your credit and your bank account should get you to Geneva. Why not go to Switzerland?
This place will be Cuba before too long, right? Why wait?

[NWRICK]

You know what they say about men that brag about size??
They got nothing.
I have a funny feeling the same applies to these rich tro//s.
If you must inform us of your wealth, it is likely all in your head!!

[NWRICK]

HP never met I banking story it didn't print. (or would that be post?)
All banks all the time?
This is really getting ridiculous.

[TiffanyHusseinBanned]

Getting? Pahlease.

Great post, though.

[MaxBob]

Our local budget for next year will be short $11M from this past year. No pay raises for civilian employees. 113 positions have also been cut. Tax revenue is way down, so this is just the beginning, I'm sure. Pres O'bailout was getting beat up when he was Mr. Doom and Gloom trying to get the stickittous passed. Now, he's lying to us about 'glimmers of light'. It is a no win position. The DOW is up, but it's a false rally driven by $$$$$trillions in government spending. We are not building anything to support a longterm recovery. No autos, no power plants, no oil drilling, NADA.

[VivaZapata]

We're building a large underclass, ensuring the thirdworldification of the United States of America.

[MaxBob]

Now, now. Cynics need not apply.

[MCMetalForever]

What did we "build" during Bush's 8 awful years ?

Enemies the world over ?

A poorer , more divided Iraq ?

A bigger separation between rich and poor ?

That's quite a resume' , isn't it ?

[MCMetalForever]

Yeah , as if relying on a finite fuel/energy source is going to support "longterm recovery" ; what is with you GOP t00ls and your obscene ign0rance ?

[digital]

Why do the banks OWE executives anything?

Didn't they just royally screw up the US economy?

[bulfinch]

It is an easy way to show an asset that is actually a fringe benefit. It has tax benefits also.

[TiffanyHusseinBanned]

What HS special ed student wrote Steele's latest speech? Good job.

Normally Steele's speeches are written by Young MC.

[BalletMom]

Heh, watch it, my kids are in SpEd!!! ;)

[TiffanyHusseinBanned]

Why did you see that? Ugh!

Go home, Ma. I want to be mean.

My bad, though. Your kids are awesome. :)

[MCMetalForever]

It sounded more like it was written by Bush ..........­..........­Oh wait , you already posted special ed kid .......Sor­ry

[proudthinker]

wow, we're resorting to special ed jokes now? Witty!

[SouthpawSass]

Is it too late to take a life insurance policy out on the Republican party?

[only1Demvoter]

Southpaw : Yes.


-ralph

[TiffanyHusseinBanned]

Yeah.

[Suzanne525]

LOL!!!

[IntelligentDesign]

Greedy selfish entitled behavior is expected of two-year olds; not of grown men supposedly responsible for the workings of our national money supply--I do believe it's time for some tough love discipline.

[MaxBob]

The economy is far from seeing the bottom. Housing declines and foreclosures are still at a record pace. Supposedly one of the key indicators for the downturn. Unemployment will set new records in the coming months as the auto industry meltdown finally occurs. Municipalities are beginning layoffs, though public safety jobs seem to be insulated so far. (except CA) If the economy doesn't brighten up by budget drafting time, public safety positions may also suffer greatly next year. Our city will only hold a reduced size police academy ONCE instead of twice a year. The disconnect from reality is growing within the Beltway. Next year will be much worse.

[MCMetalForever]

Then move elsewhere if you're unhappy ..........­...

[VivaZapata]

Yes a wealthy man like MaxBob should be able to simply uproot himself, self employed as he is, and go elsewhere. what's wrong with him? he talks like a man with a job, family and loyal to a community (even though that community has obviously failed him).

You tell him MCMetalForever; he doesn't have a clue as to how to be the spoiled brat he's supposed to be.

[pewty]

Somalia is lovely this time of year.

[only1Demvoter]

E N G U L F & D E V O U R

( A subsidiary of D irtbag Incorporated )

... Proving once again, my 40 year old assertion that " The Rich will stop at nothing to bolster their fortunes " : Laying - off bets on your Employees life expectanci­es...

Now, THAT'S good... ( ... and low. )

By the by... Since Wells ( $12 B. ) engulfed Wachovia ( $5.7 B. ) recently, their total insurance = $17.7 B., which supercedes B of A at $17.3...

... Making them the biggest D - bags in ' the business '...

...Time for me to switch primary banks.


More to follow. -ralph