Tuesday, January 4, 2011

Big Poppa

Death without Notorious AIG

            I fought the Big Poppa of the insurance world and lost. I should have known better. In the end I was crushed by a slickly crafted letter from a “Consumer Affairs Analyst” mailed to the insurance commissioner in Washington State.

            My fight started in December, when, after 11 years of promptly paying premiums, AIG told me that I had to cough up an additional $210 because my “cash value” could not pay my insurance costs. So, figuring I was probably going to get more of these demands because cash values everywhere were dropping, and miffed because I didn’t know a company could just arbitrarily start demanding more money, I complained.

            Several weeks after logging my complaint, I received the response from AIG and the insurance commissioner all packed into a manila envelope with copies of previous payment records, policy details, and other pages of neatly punctuated sentences pretending to be in plain English. In the letter from AIG, analyst Janet Morris addressed my complaint against American General Life Insurance Company and refuted my claims with deft precision. So eviscerate were the writer’s points that the “compliance analyst” with the commissioner’s office, Dan Halpin, obviously in over his league, could only cushion the blow of my defeat with the bland statement: “It appears the company has a reasonable basis for their position.”

            As I skimmed the letter sent to the commissioner by Analysts Morris, I could see the legalese that brought us to our knees. Paragraphs began with phrases like “Please note the second page . . .” and “Our records indicate . . .” and other word groupings designed to show a surgical reading of the situation.

            Since my yearly premiums were $400, I had stated in my complaint that AIG raised my rates 50%. “Simply not true,” she countered, and then she pointed out that attached evidence would show that “. . . the cost of insurance for Mr. Van Zutphen’s policy has been increasing for the last several years.” Evidently this is where my cash value was picking up the difference. I don’t remember the salesman telling me this was the deal, but Ms. Morris, I’m sure would have a line of exhibits filled with mice type that I’d agreed to.

            I suddenly felt like I unwittingly applied for a subprime mortgage on my life. As  Analyst Morris continued to carve up my position like a smooth lawyer (In fact, it’s hard to believe she isn’t). She writes that the policy is a flexible premium policy and “premiums are determined by the policy owner.” (Huh? Why have they been taking an exact c-note every quarter?)
                       
            Not through, the talented analyst continued her written excoriation: The policy . . .provides specific detail regarding Cost of Insurance . . .” Sure enough, the documents Ms. Morris so kindly provided support this succinctly: You may have to pay more than the premiums shown above to keep this policy and coverage in force to that date (“that date” it states is my 95th birthday). Gotcha!

            So now I’m applying for term insurance to cover the amount I lost, and oddly, even 10 years after the AIG policy, it’s going to cost a little over $400 a year, and be for $250,000. And, I feel more secure knowing that I wouldn’t be in my early nineties getting “pay-up $210” letters around Christmas time.

            End of story? Almost. I have a couple of points to clarify. You see, the insurance commissioner was not my first contact for my complaint; it was actually my last. After I initially got the letter from AIG, I thought this was a matter for my representatives in state and federal government because I’d heard AIG was getting more than $130 billion of taxpayer money. After all, there were $78 of expenses and charges I paid each quarter for their service. It says so right on the statement. (The fastidious Ms. Morris, I know, would agree – it’s in black and white).

            So, I needed Washington DC to know about this. I contacted the offices of my representatives, which isn’t hard to do nowadays with the Internet. Heck, one representative even sent my story to Rep. Ed Orcutt informing him that I was in Ed’s district. Anyway, my advocates in the legislatures, Joseph Zarelli, Mr. Orcutt, and Jaime Herrera; and Senator Maria Cantwell in DC (her office even phoned me) all had the same message( except Herrera who responded with a vague e-mail informing me about license plate renewals): This is a matter for the insurance commissioner. I then contacted the state Attorney General. Again I was told “call the insurance commissioner.” The buck being placed in my lap, I passed it to the insurance commissioner; evidently the only authority everyone believed could do anything. The politicians did their jobs. It was out of their in-boxes. But couldn’t they have chinked a little bit of glistening gold off the Notorious AIG? Couldn’t one of them, especially Cantwell, have sent my pedestrian paragraph of a story to AIG, or even send me one of those polite “Hey stupid” letters which diplomatically states that any idiot would know this has nothing to do with the bailout. To which I would have responded with “what are they doing with the $130B then?’ Worst case, it would have been a civics lesson for Joe Sixpack.

            Oh, there is one more thing. Although my policy lapsed February 14, AIG promptly took out $100 on February 19, continuing their automated withdrawal. I guess when politicians look the other way, AIG can force anyone to help bail them out.

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