Rick Perry pushed "dead peasants insurance" scam

Discussion in 'Politics' started by Chris, Sep 6, 2011.

  1. Chris
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    Chris Gold Member

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    Two weeks before Thanksgiving in 2003, top officials from Texas Governor Rick Perry's office pitched an unusual offer to the state's retired teachers: Let's get into the death business.

    Perry's budget director, Mike Morrissey, laid out a pitch that was both ambitious and risky, according to notes summarizing the meeting provided to The Huffington Post.

    According to the notes, which were authenticated by a meeting participant, the Perry administration wanted to help Wall Street investors gamble on how long retired Texas teachers would live. Perry was promising the state big money in exchange for helping Swiss banking giant UBS set up a business of teacher death speculation.

    All they had to do was convince retirees to let UBS buy life insurance policies on them. When the retirees died, those policies would pay out benefits to Wall Street speculators, and the state, supposedly, would get paid for arranging the bets. The families of the deceased former teachers would get nothing.

    The meeting notes offer the most direct evidence that the Perry administration was not only intimately involved with the insurance scheme, but a leading driver of the plan.

    Rick Perry Sought State Profits From Teacher Life Insurance Scheme
     
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  2. ladyliberal
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    ladyliberal Progressive Princess

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    The scheme doesn't sounds inherently immoral, but it is definitely ghoulish. It's also not clear to me how it would work. Would operating a speculative market based on schoolteacher life expectancy really bring in $700 million, as suggested in the article as a figure the planners were predicting?
     
  3. JoeB131
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    JoeB131 Diamond Member

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    This story was put out before, but it doesn't really make any sense.

    Insurance companies ONLY make money if people live a long time without incident. Then they are continuing to pay premiums. When they die, there is a payout.

    So insuring retired teachers wouldn't make sense, since they are old and aren't going to be paying premiums for a long time.
     
  4. Sallow
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    Sallow The Big Bad Wolf. Supporting Member

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    They make money on the volume. If you have alot of policies..you have a lot of liquidity coming on a monthly basis. Lots of liquidity equals more chances to do things with that money..like play the market.
     
  5. JoeB131
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    JoeB131 Diamond Member

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    So essentially, he was betting on them living, not dying...

    Not seeing a problem here.
     
  6. martybegan
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    martybegan Gold Member

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    Could this be similar to the default swaps seen in the mortgage crisis? Where basically the insurance company puts a swap on thier life insurances, so they get some of the money back when the person insured dies?
     
  7. Chris
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    Chris Gold Member

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    Dead Peasant Insurance is sometimes used as a shorthand reference for life insurance policies that insure a company’s rank-and-file employees and name the company as the beneficiary. This means that the company receives the life insurance benefits when the covered employees die. This insurance may also be called “janitor insurance,”…

    Winn Dixie Stores bought life insurance policies on approximately 36,000 of its employees, without their knowledge or consent, and named itself as the policies’ beneficiary. The insurance brokerage firm that placed the policies prepared two memos describing the deceased employees as “Dead Peasants.” These memos were part of the court’s record in a lawsuit in which the United States Court of Appeals for the Eleventh Circuit held that Winn-Dixie’s policies were a sham transaction for federal income tax purposes. The memos were later used by reporters such as Ellen Schultz and Theo Francis of the Wall Street Journal and L.M. Sixel of the Houston Chronicle and incorporated into articles about this type of insurance.

    Dead Peasants Insurance FAQ : Questions & Answers about Corporate Owned Life Insurance (COLI), Janitor Insurance
     
  8. Jarhead
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    Jarhead Gold Member

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    The way it is presented certainly sounds goulish.

    But realistically, it was a sound idea that was not really anything more than what insurance is all about to begin with, (from an investemtn standpoint)

    I see nothing wrong with it....unless it is presented the way the Huff presented it...

    But presented properly and without an agenda of slander it would not even make the second page.
     
  9. martybegan
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    martybegan Gold Member

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    So basically it covers the cost of losing an employee to untimely death, which would require hiring a new employee, probably training them, as well as a disruption from missing said employee while all this is going on?

    If Perry himself referred to it as "Dead peasants" insurance, you may have a point, but if not all of this is nothing more than your typical smear job, which is ambrosia for partisan hacks such as yourself.
     
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  10. AmericanFirst
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    AmericanFirst Gold Member

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    More liberal smear the candidate tactics. They do it because they are scared.
     

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