food (yes another rant)

Thanatos

Anyone seen Food Inc?
I just saw it. It wasn't exactly an eye-opener. I already knew about the abominations that are chicken farms and pig farms and cow farms, how cruelly the animals are treated, how the immigrant workers are exploited and feces gets into everything, and how there's a massive conspiracy going on with the corn industry trying to get corn into everything from dog food to cat food to your orange juice to cow feed to fish feed to chicken feed to medicine to soda. But still really interesting. Actually there was one thing I thought was fucking shocking. These really obese diabetic people came on and said that they had never even known fast food was unhealthy, and that they thought all food is healthy. Then they complained that they couldn't afford both diabetes medication and healthy food, it was either one or the other, so they were going to pay for the diabetes meds and stick to unhealthy food. Wtf. I think it's shocking people can fail to realize fast food is unhealthy, and even more shocking people automatically assume it's too expensive to eat healthy. Broccoli is really goddamn cheap. Lentils are really cheap. Beans are cheap. Eggs are cheap. Oranges are cheap. Healthy food is not too expensive, it's just that it's not as FILLING, and people are too goddamn greedy.


But it still got me thinking, as did Capitalism: A love Story (has anyone seen that? It's really good, you should see it).
Capitalism: A love story actually WAS an eye opener. Has anyone ever heard of Wal-Mart's "Dead Peasants" policy before?
WAL-MART BUYS LIFE INSURANCE POLICIES ON ITS EMPLOYEES WITHOUT THEIR KNOWLEDGE OR PERMISSION, AND THEN HOPES THEY DIE SO THAT THEY CAN CLAIM THE LIFE INSURANCE.
They actually figure these deaths into their annual finance reports, like, expecting than x number of employees will die this year and therefore there will be x amount of revenue from the life insurance they bought on those people.

That's fucking crazy! There's already a significant number of people who get murdered by their crazy ex-husbands, wives, friends and so on every year for life insurance money. If we let companies and corporations buy life insurance on people without those people knowing about it or consenting, it's ridiculously dangerous. It's just INSANE that someone can take out a life insurance policy on you and profit from your death without you being able to stop them.

c.j.86

Walmart takes out a life insurance policy on every employee betting on the odds that every year at least a few of the their thousands of employees will die? The ethics are questionable, but if their yearly payouts significantly exceed their premiums, its actually a hilariously smart idea. I'm assuming that they don't do anything to actually cause or contribute to the deaths of any of their employees.

I'm not sure if it's legal in Canada though. According to my business law textbook, you have to have either an "insurable interest" or the person's permission to be able to take out a life insurance policy on someone. Having an insurable interest means that you would actually experience losses, financial or otherwise, if the person died. You can't just take out a life insurance on some random person on the odds that they might die. Otherwise people would be taking out policies on everyone they could find that's over 80.

It's pretty common for businesses to have life insurance policies on key officers like the CEO, but I think it might be a bit of a stretch for Walmart to argue that the death of, say, a greeter would cause them enough of a loss in hiring and training costs to justify the existence of an insurable interest. On the other hand, law is pretty strange, so maybe. Very interesting either way.

Thanatos

'Does your boss want you dead?' - Liz Pulliam Weston

Hundreds of companies -- including Dow Chemical, Procter & Gamble, Wal-Mart, Walt Disney and Winn-Dixie -- have purchased this insurance on more than 6 million rank-and-file workers.

These policies, nicknamed dead janitors or dead peasants insurance, soared in popularity after many states cleared the way for them in the 1980s. Congress recently tried to crack down on the practice, to the howls of the insurance industry -- which earlier this year managed to derail reforms.

The policies have generated lawsuits by survivors who got little or nothing when insured workers died. A couple of examples:
Jane St. John had two children and was pregnant with a third when her husband, a butcher at a Winn-Dixie store, was killed in an auto accident. When the Killeen, Texas, woman called the company to ask about insurance, she said she was told about a $17,500 policy to which she was entitled. St. John said Winn-Dixie told her nothing about the $102,000 the company collected from a corporate-owned policy on his life. She found out about it this summer, eight years after his death, from a lawyer who researched court records. The idea that the company would secretly insure lives, and then not share the benefits with the families, "is sick," she said. "That is creepy."

Mike Rice was a 48-year-old assistant manager when he died of a massive heart attack at the Wal-Mart store in Tilton, N.H. His widow, Vicki, became the lead plaintiff in a class-action lawsuit against the company after she discovered Wal-Mart collected $300,000 from a life insurance policy it owned on him. Vicki Rice believes job-related stress contributed to the heart attack and says it is totally immoral for Wal-Mart to profit from his death.
In a lot of circumstances, the families dont get anything, said attorney Mike Myers of Houstons McClanahan & Clearman, which represents survivors suing companies over corporate-owned policies. The company tries its hardest to keep the policy a secret.

Labor leaders and some lawmakers have denounced the policies as unjust and repulsive. The companies say profits from the policies can help offset the increased cost of employee benefits and enhance the businesses bottom lines.

Corporate-owned life insurance actually comes in two flavors:
Executive or key person policies that insure the lives of top executives. This coverage has been around for decades and has a clear business purpose, since losing the expertise, knowledge and contacts of top managers can be financially devastating for companies.

Broad-based or janitors policies that insure rank-and-file workers. Here the purpose is basically profit. The life insurance proceeds are tax-free. The policies have an investment component that allows companies to earn tax-deferred returns while the employee is still alive. And, of course, companies can take out tax-free loans on the policies. All these gains and income are used to fund operations, pay for executive compensation or boost other benefits.
No one knows how many corporate-owned policies are issued on executives versus rank-and-file workers. Wal-Mart alone had taken out about 350,000 such policies between 1993 and 1996. Nestle USA had policies on 18,000 workers in 2002, The Wall Street Journal reported. Enron had $500 million in policies on workers.

Sales of the policies came to a virtual standstill in September 2003, according to the insurer trade group ACLI, when the Senate Finance Committee approved legislation that would have taxed payouts made to companies if the employee had left more than a year earlier. That indicates that most policies arent being sold to protect companies financially against the loss of key current employees.

Strong insurance industry protests led the powerful committee to reconsider its action. Further work on the issue has been postponed until 2004, and indications are that the senators are softening on the idea of greatly restricting the policies, said Jack Dolan, ACLI spokesman.

Companies insist that janitors policies have a legitimate business function, but the IRS has been cracking down, arguing that many of the arrangements are nothing more than tax shelters. The agency has been particularly harsh on once-popular leveraged policies, in which policy loans were used to pay premiums. In the mid-1990s, the tax agency began disallowing billions of dollars in interest payment deductions the companies had been taking on such loans. Companies efforts to defend their programs have been largely unsuccessful; a U.S. Tax Court judge called Winn-Dixies program a sham, saying it lacked economic substance and business purpose.

The controversy helped convince Walt Disney and Wal-Mart, among others, to drop the policies. Winn-Dixie battled the IRS in court, but the supermarket chain recently lost its final round when the Supreme Court refused to review a lower court decision that backed the IRS.

So far, one company has prevailed against the IRS -- Dow Chemical, which took out the policies on more than 21,000 workers. A U.S. District Court in the Eastern District of Michigan ordered the IRS to return $22.2 million plus interest to the company. The IRS has appealed the ruling.

Survivors lawsuits, meanwhile, typically focus on two issues:
Whether the companies had an insurable interest in their employees lives.

Whether the companies were required to get the employees permission for the policies.
Insurable interest is usually a big deal for insurers. They want to make sure whoever is buying life insurance doesnt have an incentive for bumping off the insured. Insurers usually require purchasers have a strong familial or emotional connection to the people being insured, or that they would suffer significant financial losses if the insured people died.

(Its that latter standard that was loosened in the 1980s, making it easier for companies to buy policies for all their employees, not just key executives.)

Most states also have advise and consent laws that technically require companies to get workers permission before buying life insurance on them. But attorney Myers said many businesses circumvent these laws by purchasing the insurance in one of the states that doesnt require notice or consent, including Delaware, Georgia, New Jersey, North Carolina, Pennsylvania and Vermont.