Trans World Assurance
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At the hearing in May, Trans World argued that its policy, called the Flexible Dollar Builder, was not subject to the military protection features in Georgia’s law.
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Its lawyers argued that the savings fund was part of the policy’s cash value, which made it exempt from rules governing “side funds” set up in tandem with insurance policies.
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That view was supported by the tax-free treatment of the cash that accumulates in the fund, the lawyers said.
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Mr. Oxendine rejected that reasoning, saying it was inconsistent with both Georgia court decisions and the insurer’s own financial statements and sales materials.
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In one brochure, for example, the company distinguished a policy’s “accumulation fund” from its “cash value.”
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And in its financial filings, it described the money in the funds as “deposits.”
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2008 0703 - NYT - Georgia Bars Insurance Firm Over Violations Regulators in the state say Trans World Assurance, by Diana B. Henriques - [link]
- 1998 0717 - Tampa Bay Times - Insurers Accused of Bilking Recruits - [link]
- The problem, investigators and prosecutors say, is that customers did not read the pamphlets, simply taking the word of persuasive sales agents.
- "American Fidelity obviously is not in a position to know exactly what is said at each point-of-sale," the companies' lawyers argued in motions to prevent a temporary injunction.