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Tuesday, August 02, 2005

Caution! Lobbyists at Work

Insurers are trying to ensure themselves a share of the retirement security market by lobbying for favorable legislation such as tax breaks for retirement annuities:

Insurers Want Their Say in Social Security Debate, By Joseph B. Treaster, NY Times:  … regardless of the outcome of Republican proposals to add private accounts to the system, the nation's huge life insurance industry stands to benefit from the debate over Social Security's future. Already, the debate has called attention to retirement concerns. Insurers have been increasingly focusing on selling investments for retirement and they are doing their best to capitalize on the attention. Moreover, if Congress does end up changing Social Security, there is a good chance any new law would favor the kind of investments called annuities that insurers love to sell. … [T]he insurers have strengthened their main trade association and lobbying arm, the American Council of Life Insurers, and many individual companies are working independently to win advantages for their products. Last year, the trade group alone reported spending $9.1 million on lobbying, up 54 percent from the previous year. … In making their pitch now, the insurers emphasize that their annuities can contribute to national savings and provide "a paycheck for life" similar to Social Security. They also contend that a flexible savings plan advocated by President Bush, which would probably take money away from them, would probably not increase long-term savings. And the insurers are trying to prevent the elimination of the estate tax, which many wealthy Americans now pay with the proceeds of life insurance policies. … The lobbying campaign may already be paying off. Some of the most powerful Washington leaders have been picking up on the broader issue of retirement and the woeful inadequacy of savings by most Americans…

    Posted by on Tuesday, August 2, 2005 at 01:44 AM in Economics, Politics, Saving, Social Security | Permalink  TrackBack (0)  Comments (4)

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