Making a profit on soldiers' death benefits

'It's disgraceful on the part of insurance companies,’ McCain says

By Tony Capaccio and Patrick O'Connor
Bloomberg/Business Week
updated 8/9/2010

Why are large life insurance companies profiting from billions of dollars they hold on behalf of the families of fallen military service members?

Bloomberg Markets magazine senior writer David Evans posed that question in an article in its September issue. The article, which took a close look at practices at Prudential Financial, has sparked sharp criticism from Cabinet members, reform proposals from U.S. lawmakers, and a fraud investigation by the New York Attorney General.

The U.S. Veterans Affairs Dept. and the National Association of Insurance Commissioners say they are reviewing military life insurance arrangements.

"It's disgraceful on the part of insurance companies," Senator John McCain (R-Ariz.), a onetime prisoner-of-war in Vietnam, said in an interview on Bloomberg Television. "We'll obviously have to be looking into it."

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