Wal-Mart takes outdead peasant insurance on employees--$500,000/payable to Wal-Mart

February 28, 2005

Dead Peasant Insurancealso known as "Dead Janitors Insurance"

How much are you worth dead to your company?

Wall Street Journal: "The practice is as widespread as it is little-known. Millions of current and former workers at hundreds of large companies are thus worth a great deal to their employers dead, as well as alive, yielding billions of dollars in tax breaks over the years, as well as a steady stream of tax-free death benefits."

Does yours?

Dead Peasant Policy: Washington Post Primer

• Industry slang for insurance policies taken out by corporations on the lives of thousands of their rank-and-file employees, usually without workers' knowledge or consent.

• An insurance product that allows corporations to earn tax-free investment income on money put aside for retiree health and pension benefits

• According to articles in the Houston Chronicle and Wall Street Journal last week, a questionable gambit used by at least 100 large corporations to boost profits by taking advantage of the tax-shelter features of life insurance.

• The source of an estimated $6 billion in lost tax revenue to the Treasury each year and the subject of several pending tax court cases.

• A product actively marketed by the insurance industry as an "attractive, off-balance-sheet asset."

Enron Subsidiary took out Dead Peasant InsuranceWorkers lost their retirement; benefits are paid to executive's retirement fund

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Funeralgate

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Let people know

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http://www.texassportfishing.com/editorial2.htm

January 10, 2003

Editorial

Wal-Mart shows evidence of "collective psychopathy" when it takes employee exploitation to ghoulish heights with "dead peasant" life insurance policies.

by

R.H. Meyer

In violation of Texas law, Wal-Mart has been taking out life insurance policies on its employees without their knowledge and naming the company as beneficiary. Another prominent user of these "dead peasant" insurance policies is, you guessed it, Enron. The difference between the Enron and Wal-Mart in this matter is that Enron didn't break Texas Law as did Wal-Mart. In Texas, it is illegal for any person or company to take out a life insurance policy on any other person without telling the person first. Wal-Mart chose to ignore Texas law when it took some 350,000 dead peasant policies on employees, including Texas employees, without telling them.

The arrogance of Wal-Mart in purchasing these policies in defiance of Texas law is almost beyond belief. The ghoulishness of this practice speaks to the utter disregard - indeed contempt - that Wal-Mart holds for its "associates". Executives enriching themselves on the death of their employees. How low can one sink?

I wonder how secure Mr.Coughlin and the rest of the executives and directors of Wal-Mart would feel if Wal-Mart employees started purchasing life insurance on them without their knowledge. Do you think it might give them cause for concern? There's a reason the "insurable interest" doctrine in exists in Texas*. And, there is need for a similar doctrine at the federal level.

Several years ago Wal-Mart embarked on a television ad campaign featuring older semi-retired employees in an apparent attempt to recruit older folks into their employ. Is it possible that Wal-Mart valued its older "associates" in a more sinister way?

Conclusion: Wal-Mart is a company without a conscience. If Wal-Mart was a person, the terms "psychopath" or "sociopath" would apply. But Wal-Mart is a corporation, an "artificial person" under the law. So, in Wal-Mart's case, there seems to be a "collective psychopathy" on the part of its directors and executives. It's time for the Texas Attorney General take steps to control this monster.

Notes:

* Drane v. Jefferson Standard Life Ins. Co. 139 Tex 101, 161 S.W.2d 1057, 1058 (1942) an insurable interest:

....is determined by monetary considerations, viewed from the standpoint of the beneficiary. Would he regard himself as better of from the standpoint of money, would he enjoy more substantial economic returns should the insured continue to live; or would he have more, in the form of the proceeds of the policy, whould she die? Therefore it is said that if the situation is such that he might be led to conclude that he would profit by her death, the policy contract is void as to him since the public has a controlling concern that no person have an interest in the early death of another, an interest that may give rise to a temptation to destroy her life.

The Ellen E. Schultz and Theo Francis of the Wall Street Journal state the case a bit more bluntly in the article 'Janitors Insurance' Issue Leaves Workers in the Dark on Coverage (April 24, 2002) when they state:

Until the 1980s, employers weren't allowed to take out policies on workers because they had no "insurable interest" in their survival. In other words, the company couldn't argue that it would suffer financial hardship if janitors, file clerks and nonessential executives perished. Insurable interst rules were designed to prevent life insurance from providing an incentive for murder or negligence, and ultimately discourage one person from "wagering" on the life of another.

This editorial is a statement of opinion by the management of TexasSportsNetwork and TexasSportfishing.com who take sole responsibility for its content. You may direct your comments to: rhmeyer.