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Disclosure To The Rescue: A Conceptual Framework For Retained Asset Accounts, Maria Hylton

Maria Hylton

This paper examines the relatively recent creation by life insurers of retained asset accounts (RAAs). An RAA is a fictional “account” into which a beneficiary’s insurance proceeds may be “deposited” in lieu of a traditional check upon the death of an insured. Many RAAs earn a rate of interest that is greater than that available on funds deposited in a conventional ban account, but less than the return on investment an insurer is able to generate. The insurer profits from this spread. RAAs have been controversial as beneficiaries claim that limited disclosure to them has made it difficult to make …