‘Disasters Do Happen’
Do ents released in the FOIA request show some signs of concern within the VA after Prudential proposed the retained-asset accounts in 1998. Lastowka, the official who allowed Prudential to introduce the Alliance Accounts, said that the insurer’s “checkbook” system wasn’t protected by the FDIC.
“Disasters do happen,” wrote Lastowka, in an e-mail dated June 9, 1999, to Stephen Wurtz, the agency’s deputy assistant director for insurance.
Lastowka said in his e-mail that the lack of FDIC coverage could backfire on survivors.
“Who is responsible if Alliance goes belly up?” Lastowka asked. “I think we have to also be prepared to defend the use of the Alliance Account.”
Lastowka also asked whether Prudential had adequately disclosed to survivors that the Alliance Accounts weren’t covered by FDIC insurance. ”Did Pru alert us to the non- FDIC fact?” he wrote to Wurtz. “Or was it in small print as the notice to beneficiaries?”
Do ents turned over by the VA didn’t include a response from Wurtz.
‘Aware of Issues’
Lastowka says his e-mail shows the decision to allow Alliance Accounts was carefully considered.
“This e-mail demonstrates simply that the VA’s Insurance program was aware of issues that might be raised as we implemented the payment method and that we should be prepared to respond to inquiries,” Lastowka says. “We were confident that we were making a decision which would benefit survivors.”
The FOIA do ents show that on June 10, 1998, Prudential gave a presentation to the VA. It included 10 pages of key points, saying the Alliance Accounts would benefit survivors because they would provide safety, flexibility in how and when to use their money, compe ive interest rates and customer service.
In fine print, at the bottom of one of the pages, was this caveat: “Funds in the Alliance Account are direct obligations of The Prudential Insurance Company of America and are not insured by the Federal Deposit Insurance Corporation.”
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Prudential to introduce the Alliance Accounts, he had the authority to do so. There is also mention of, several times, a verbal contract. Do you think he was just "allowing" himself to enter a verbal "allowance" with Prudential? Common sense would dictate that since: Lastowka was indeed the Director of VA Insurance, and he "allowed" Prudential to introduce Alliance Accounts, and he entered into a verbal "allowance" with Prudential, that he did, indeed, posess the authority and scope to do so.
