Repeal "Ban Profits on Workers' Deaths"

[Schutzenphalia and West Ruhntuhnkuhnland]

Ban Profits on Workers' Deaths
A resolution to reduce income inequality and increase basic welfare.

Category: Social Justice
Strength: Mild
Proposed by: Sionis Prioratus

Description: The World Assembly:

AWARE that in countries that allow international corporations, most of the time these corporations act as a force for good, providing employment and economic strength to the communities in which they operate;

FURTHER AWARE that, in order to maximize profits, international corporations may lawfully distribute their corporate subdivisions among many different countries to benefit from a multitude of variations on national subsidies, lower taxes, reduced bureaucratic overload, and so on;

APPALLED that some corporations and other employers can and sometimes do secretly buy life-insurance policies in their employees’ names, designating the corporations themselves as beneficiaries, thus demonstrating to be more interested in their employees’ deaths as a source of revenue than in their actual well-being;

DEPLORING such a practice;

DETERMINED to end it once and for all;

IT IS ESTABLISHED:

1) Defines, for the purpose of this resolution, “Dead peasant policy” as when an employer secretly buys a life-insurance policy in an employee’s name, designating the employer itself as a beneficiary, collecting or expecting to collect benefits after the death of said employee.

2) The employee’s free, fully informed, uncoerced consent shall be required for the validity of any life-insurance wherein her/his employer is a beneficiary. Other beneficiaries of the employee’s own free choosing shall receive at least half the benefits of any life-insurance policy, present or former, in which the employer is or was a beneficiary.

3) To fire, burden, harass, penalize or pressure any employee for not listing her/his employer as a beneficiary of a life-insurance policy is forbidden.

4) Any employees, present or former, targeted by dead peasant policies have the right to have any and all personal documentation pertaining to participation in said policies fully disclosed and may seek and obtain the immediate annulment of such policies without let or hindrance; if an employee is deceased, that employee’s heirs, if any, shall have the aforementioned right in lieu of said employee.

Co-authored by Christian Democrats

Votes For: 9,205
Votes Against: 2,260

Implemented Thu Jan 3 2013

[WAR233 on NS] [WAR233 on NSwiki] [Official Debate Topic]

The World Assembly,

Firmly urging member nations to look beyond the politically expedient title and inflammatory language of Resolution #233, “Ban Profits on Workers' Deaths”,

Perturbed that the designation “dead peasant policy” does not accurately represent those most likely to be subject of such insurance claims, which would logically only be worth pursuing for relatively valuable salaried employees rather than easily replaceable, low-skilled wage workers,

Expressing extreme reservations about the requirement that at least half of all life insurance policy benefits go to other beneficiaries than the company actually paying the premiums on such policy, given that:

• The value of such a policy for a key worker such as a creator of industrial patents, a holder of trade secret protected information, or an innovator in a field of rapid technological development, could vastly exceed that required to support the cost of living for dependents.
  
• The loss of such a worker could incur huge costs given the potential loss of proprietary information, and that without recovering the policy the company would no longer be able to operate, especially in the case of small businesses, companies in expanding markets working on thin margins, and critical fields of development such as pharmaceuticals and communications.
  
  
• The dependents could reasonably be expected to accept a much lesser settlement that would still satisfy their cost of living needs, where the return on such a policy greatly exceeds the worker's final salary.

Therefore in consideration of this, and without consequence for possible future legislation reinstating specific regulations on the insurance industry or requirements for disclosure of employment conditions,

World Assembly Resolution #233, “Ban Profits on Workers' Deaths”, is hereby repealed.

The World Assembly,

Firmly urging member nations to look beyond the politically expedient title and inflammatory language of Resolution #233, “Ban Profits on Workers' Deaths”,

Perturbed that the designation “dead peasant policy” does not accurately represent the relatively valuable salaried employees for whom corporate owned life insurance will often be necessary,

Expressing extreme reservations about the requirement that at least half of all life insurance policy benefits go to other beneficiaries than the company actually paying the premiums on the policy, given that:

• The value of a policy for a key worker such as a creator of industrial patents, a holder of trade secret protected information, or an innovator in a field of rapid technological development, could vastly exceed that required to support the cost of living for dependents.
  
• The loss of such a worker could incur huge costs given the potential loss of proprietary information, experience and expertise, and without recovering the policy the company would not be able to cover these losses, especially in the case of small businesses, companies in expanding markets working on thin margins, and critical fields of development such as pharmaceuticals and communications.
  
  
• The dependents could reasonably be expected to accept a much lesser payment that would still satisfy their cost of living needs, where the return on such a policy greatly exceeds the worker's final salary.

Concluding that, faced with the inability to cover losses with insurance in the necessary amounts, there is a risk of companies passing on excessive burdens to the employee, thereby negating any financial benefit to the system,

Therefore in consideration of this, and without consequence for possible future legislation reinstating specific regulations on the insurance industry or requirements for disclosure of employment conditions,

World Assembly Resolution #233, “Ban Profits on Workers' Deaths”, is hereby repealed.

Argument: The World Assembly,

Firmly urging member nations to look beyond the politically expedient title and inflammatory language of Resolution #233, “Ban Profits on Workers' Deaths”,

Perturbed that the designation “dead peasant policy” does not accurately represent the relatively valuable salaried employees for whom corporate owned life insurance will often be necessary,

Expressing extreme reservations about the requirement that at least half of all life insurance policy benefits go to other beneficiaries than the company actually paying the premiums on the policy, given that:


• The value of a policy for a key worker such as a creator of industrial patents, a holder of trade secret protected information, or an innovator in a field of rapid technological development, could vastly exceed that required to support the cost of living for dependents.
  
  
• The loss of such a worker could incur huge costs given the potential loss of proprietary information, experience and expertise, and without recovering the policy the company would not be able to cover these losses, especially in the case of small businesses, companies in expanding markets working on thin margins, and critical fields of development such as pharmaceuticals and communications.
  
  
• The dependents could reasonably be expected to accept a much lesser payment that would still satisfy their cost of living needs, where the return on such a policy greatly exceeds the worker's final salary.

Considering that, faced with the inability to cover losses with insurance in the necessary amounts, there is a risk of companies passing on excessive burdens to the employee, thereby negating any financial benefit to the requirement,

Concluding that the requirements hamstrings keyperson insurance policies from being effective in a manner that does not enhance workers' rights nor prevent corporate abuses,

Therefore in consideration of this, and without consequence for possible future legislation reinstating specific regulations on the insurance industry or requirements for disclosure of employment conditions,

World Assembly Resolution #233, “Ban Profits on Workers' Deaths”, is hereby repealed.

[Defwa]

Before the passage of GAR#233, companies did actually create secret life insurance policies on their works, many low wage, in order to generate profit from their deaths (RL reference, see Walmart).
The resolution does not ban employers from ever being the beneficiary but it stops them from betting against the life of their employees and therefore potentially being incentivized to endanger them. Employees can still, with their informed consent, allow their employer to take out these policies.
I'm not even sure what your third bullet point means, about families accepting lesser settlements. I would need additional explanation on that.

[Schutzenphalia and West Ruhntuhnkuhnland]

Before the passage of GAR#233, companies did actually create secret life insurance policies on their works, many low wage, in order to generate profit from their deaths (RL reference, see Walmart).

Which was to exploit a tax loophole. There might be such tax loopholes in certain nations but there is no reason to assume every nation, or even many nations, have similar tax codes. Ceteris paribus there would be little value in taking out such a policy on a readily replaceable worker.

The resolution does not ban employers from ever being the beneficiary but it stops them from betting against the life of their employees and therefore potentially being incentivized to endanger them. Employees can still, with their informed consent, allow their employer to take out these policies.

Regardless, it requires that at least half of the payout from such a policy go to the designated beneficiaries rather than the company. The resolution could have easily accomplished the goal of eliminating moral hazard without instituting such a bizarrely restrictive system.

I'm not even sure what your third bullet point means, about families accepting lesser settlements. I would need additional explanation on that.

Ok, this is the crux of the argument, so it's important.

Let's say a pharmaceutical chemist working in drug development is involved in key processes, in a market worth billions of NS$. Her value is so high to the company that it is worth their taking out insurance against catastrophic loss (in this case, her death). If she were to die, it would stall their drug development programs, and they would need to cover those losses to assure investors, who would otherwise be concerned that the loss of a single employee could jeopardise their returns. (You don't become a billionaire becoming the second person to invent a drug.) They would also be paying a hefty premium on such a large policy. If the worker did die, then her life partner and their two adoptive children could easily maintain a comfortable standard of living if they received benefits commensurate with, or even several times the amount of, her final salary - but there is no reason they would need "at least half" of a payout that would probably run into the tens or hundreds of million NS$.

If the resolution had simply omitted that requirement, I would not be opposing it, and definitely wouldn't be proposing a repeal; but imposing that requirement is senseless given it makes it impossible for a company to cover their losses and at the same time grants an exorbitant proportion of the policy's benefits to dependents who have not contributed to the premium and whose needs could easily be met by receiving a lower amount.

[Bananaistan]

Nice to see that the WA took the time to ban key man insurance unless the spouse/whomever gets half of the proceeds, crazy stuff altogether. Fully behind this repeal attempt.

Edit: Also don't like the first part of clause 2: "The employee’s free, fully informed, uncoerced consent ". For the key man insurance argument, there's absolutely no good reason as to why the employee's consent should be needed.

[Schutzenphalia and West Ruhntuhnkuhnland]

Also don't like the first part of clause 2: "The employee’s free, fully informed, uncoerced consent ". For the key man insurance argument, there's absolutely no good reason as to why the employee's consent should be needed.

My reason for not including an argument against that in the repeal is twofold. First, I think the basic point regarding the "at least half" is sufficient grounds for repeal in itself. Second, I fear that people who might support the basic argument might oppose the secondary argument, and hence actually lose support for the repeal.

It's like the resolution itself: I support some of what the resolution is trying to do, but not all of it, and on those grounds favour a repeal. So I equally don't want to give grounds for people to oppose some of my repeal.

I'm willing to include the argument if it's generally felt it will help the repeal, though.

[Bananaistan]

That's fair enough.

A further point which I believe unfortunately you can't use in the repeal but perhaps someone who was around at the time it passed can clarify, why did nobody challenge the legality of the name? It bears no relation to the content of the operative clauses. One could just as easily have the 'sweet and cuddly apple pie and motherhood act' which actually mandates the execution of everyone aged over, say, 21.

[Schutzenphalia and West Ruhntuhnkuhnland]

There's nothing I can do about that, nor the fact the repeal will be automatically titled Repeal "Ban Profits on Workers' Deaths", which sounds pretty awful. I included a line urging people to look past the title - but, I suppose, if they're not going to do so, then that line won't do much good anyhows!

Thank you for your comments.

[Separatist Peoples]

"This is a very impressive first attempt. At least I think it's a first attempt. I've been wrong before. The content seems fairly solid, but I think your format is a bit off. It's a wall of text, really. If you could break this down into more consice-looking arguments, it would read better. Hell, better spacing would go a long way.

"Tentative support."

[Defwa]

Before the passage of GAR#233, companies did actually create secret life insurance policies on their works, many low wage, in order to generate profit from their deaths (RL reference, see Walmart).

Which was to exploit a tax loophole. There might be such tax loopholes in certain nations but there is no reason to assume every nation, or even many nations, have similar tax codes. Ceteris paribus there would be little value in taking out such a policy on a readily replaceable worker.

The resolution does not ban employers from ever being the beneficiary but it stops them from betting against the life of their employees and therefore potentially being incentivized to endanger them. Employees can still, with their informed consent, allow their employer to take out these policies.

Regardless, it requires that at least half of the payout from such a policy go to the designated beneficiaries rather than the company. The resolution could have easily accomplished the goal of eliminating moral hazard without instituting such a bizarrely restrictive system.

I'm not even sure what your third bullet point means, about families accepting lesser settlements. I would need additional explanation on that.

Ok, this is the crux of the argument, so it's important.

Let's say a pharmaceutical chemist working in drug development is involved in key processes, in a market worth billions of NS$. Her value is so high to the company that it is worth their taking out insurance against catastrophic loss (in this case, her death). If she were to die, it would stall their drug development programs, and they would need to cover those losses to assure investors, who would otherwise be concerned that the loss of a single employee could jeopardise their returns. (You don't become a billionaire becoming the second person to invent a drug.) They would also be paying a hefty premium on such a large policy. If the worker did die, then her life partner and their two adoptive children could easily maintain a comfortable standard of living if they received benefits commensurate with, or even several times the amount of, her final salary - but there is no reason they would need "at least half" of a payout that would probably run into the tens or hundreds of million NS$.

If the resolution had simply omitted that requirement, I would not be opposing it, and definitely wouldn't be proposing a repeal; but imposing that requirement is senseless given it makes it impossible for a company to cover their losses and at the same time grants an exorbitant proportion of the policy's benefits to dependents who have not contributed to the premium and whose needs could easily be met by receiving a lower amount.

[/quote]But it has been used, to great effect, on low level employees. Even with high taxation on the practice, that doesn't fix the fact that companies can bet against their employees lives and profit. That, combined with the fact that more than a few nations don't actually care about these low income individuals, can create a very bad environment.

By my understanding, should the insured decide to add beneficiaries, there is nothing stopping the company from charging them for that benefit. Considering that would be prohibitively expensive in the situations you're describing, it would make sense for these things to go in pairs with a smaller plan.
This allows companies and employees to create equitable arrangements. And most importantly, doing so with the full knowledge of the insured

[Schutzenphalia and West Ruhntuhnkuhnland]

If you could break this down into more consice-looking arguments, it would read better. Hell, better spacing would go a long way.

It would be folly to hope for concision from The Vereinigteeisenprinzipalität of Schutzenphalia and West Ruhntuhnkuhnland. Nonetheless, I do feel spelling out the arguments is important as they are obviously not intuitive. I will insert some whitespace but for now I'm going to leave the enumeration in.

But it has been used, to great effect, on low level employees. Even with high taxation on the practice, that doesn't fix the fact that companies can bet against their employees lives and profit. That, combined with the fact that more than a few nations don't actually care about these low income individuals, can create a very bad environment.

Your implication is clearly that employers would entertain moral hazard, but it doesn't quite follow. For an insurance company to underwrite the policy, they would surely insist on at least rudimentary precautions; if anything, having such policies in place would increase worker safety. Insurance companies are not going to take on policies where there is a serious risk of them losing the "bet": that's the whole point of insurance.

I still don't think it's particularly likely that employers would target low wage workers unless there were some secondary benefit such as a tax loophole, but I'm leaning towards omitting this argument entirely to concentrate on the main thrust.

By my understanding, should the insured decide to add beneficiaries, there is nothing stopping the company from charging them for that benefit. Considering that would be prohibitively expensive in the situations you're describing, it would make sense for these things to go in pairs with a smaller plan.
This allows companies and employees to create equitable arrangements.

This doesn't make any sense. There is no way a company could possibly recoup their losses if they can only claim less than 50% of a policy's payout, and no way a worker could cover the premiums on such a policy. And charging the worker an exorbitant premium defeats the entire purpose of the arrangement. We come back to: it's very probable a worker would be satisfied with taking a much lower part of the overall sum, given that their only concern is the security of their dependents, whereas the company's concern is the entire financial wellbeing of their organization.

[Ertae]

Consent of the insured may not be necessary with reasonable financial justification guidelines, which you would expect from the insurer purely as good business practice.

Regardless of that point, I agree the clause about the insured naming a personal beneficiary makes no sense. There are legitimate business coverage scenarios and legitimate personal coverage scenarios. I see no reason why they should overlap.

[Normlpeople]

OOC: Complete support. This looks like it was rammed through based on what was the latest newspaper scandal.

IC: "I support this, if no other reason than I find it unfathomable that the worker can designate half of a company owned, and company paid for, life insurance policy simply because a company may wish to hedge their bets on an employees works or protect their investment. I would suggest a statement reflecting this, as well as perhaps mentioning that additional costs for the policy due to the increased premiums paid because of that clause, may affect additional employment benefits in some way."

[Schutzenphalia and West Ruhntuhnkuhnland]

There are legitimate business coverage scenarios and legitimate personal coverage scenarios. I see no reason why they should overlap.

That's a very good way of phrasing it.

"I support this, if no other reason than I find it unfathomable that the worker can designate half of a company owned, and company paid for, life insurance policy simply because a company may wish to hedge their bets on an employees works or protect their investment. I would suggest a statement reflecting this, as well as perhaps mentioning that additional costs for the policy due to the increased premiums paid because of that clause, may affect additional employment benefits in some way."

I'm not sure how truly likely that is. I suspect it's more probable that companies will simply outsource skilled labour outside the remit of the World Assembly. Nonetheless, I have included the argument, if only to demonstrate the flawed internal logic of the resolution if taken literally.

Thank you both for your comments.

[Old Hope]

And what is so bad about not being able to insure your company for a workers death?
(Actually, this resolution does not stop you from making an insurance about the inability to work, which automatically includes death, but wouldn't be a life ensurance, so what is the problem?)

[Schutzenphalia and West Ruhntuhnkuhnland]

And what is so bad about not being able to insure your company for a workers death?

As mentioned, such a death can have significant consequences for a firm reliant on a particular individual whose skills and knowledge cannot be easily replaced, such as a lawyer or an inventor.

(Actually, this resolution does not stop you from making an insurance about the inability to work, which automatically includes death, but wouldn't be a life ensurance, so what is the problem?)

I'm not familiar with any keyperson policies of that type: do you have an example, so that I could follow your argument?

[Schutzenphalia and West Ruhntuhnkuhnland]

New (i.e. substantially similar) draft posted.

[Separatist Peoples]

And what is so bad about not being able to insure your company for a workers death?

As mentioned, such a death can have significant consequences for a firm reliant on a particular individual whose skills and knowledge cannot be easily replaced, such as a lawyer or an inventor.

(Actually, this resolution does not stop you from making an insurance about the inability to work, which automatically includes death, but wouldn't be a life ensurance, so what is the problem?)

I'm not familiar with any keyperson policies of that type: do you have an example, so that I could follow your argument?

"Considering there are nations from other worlds, times, and dimensions, it's probably not uncommon."

[Schutzenphalia and West Ruhntuhnkuhnland]

"Considering there are nations from other worlds, times, and dimensions, it's probably not uncommon."

With respect to the requirements of art, a probable impossibility is to be preferred to a thing improbable and yet possible.

Although I suppose Aristotle doesn't exist in these other dimensions either.

[Separatist Peoples]

"Considering there are nations from other worlds, times, and dimensions, it's probably not uncommon."

With respect to the requirements of art, a probable impossibility is to be preferred to a thing improbable and yet possible.

Although I suppose Aristotle doesn't exist in these other dimensions either.

"Perhaps in your nation, ambassador, willful ignorance of a perfectly viable loophole is preferred, but to most of the seasoned veterans of the World Assembly, legal loopholes are rarely dismissed as entirely improbably unless they are significantly more expensive than compliance. Since the Old Hope ambassador's suggestion is not especially outlandish or prohibitively expensive, it's worth being entertained. It in no way invalidates this repeal effort, so your resistance to the possibility and determination to one particular way of thinking is concerning."

[Schutzenphalia and West Ruhntuhnkuhnland]

With respect to the requirements of art, a probable impossibility is to be preferred to a thing improbable and yet possible.

Although I suppose Aristotle doesn't exist in these other dimensions either.

"Perhaps in your nation, ambassador, willful ignorance of a perfectly viable loophole is preferred, but to most of the seasoned veterans of the World Assembly, legal loopholes are rarely dismissed as entirely improbably unless they are significantly more expensive than compliance. Since the Old Hope ambassador's suggestion is not especially outlandish or prohibitively expensive, it's worth being entertained. It in no way invalidates this repeal effort, so your resistance to the possibility and determination to one particular way of thinking is concerning."

I don't think you really understand the point I was making, but I should probably have realized it was a pretty hopeless cause.

Anyway, what they're talking about is called income protection insurance, and yes, it is technically different from life insurance. But it's also much, much harder to get, especially for keyperson insurance. The premiums would be much higher because it's covering a much greater range of exigencies, it's much harder to get, and many - most? - insurance companies wouldn't even offer it because while it makes actuarial sense to bet against someone dying, it doesn't make actuarial sense to bet against someone not being able to continue working.

It's not a "loophole", because it's not a realistic possibility. Though as I've said, I would welcome a genuine counterexample: not simply some vague hypothetical sketched on the back of a napkin.

[Separatist Peoples]

"A rather Jakusan approach to a not unreasonable issue, ambassador. This this is the same assembly where governments have refused to recognize any marriages so they don't have to recognize homosexual marriage, or that believe the Human Rights category doesn't apology to non-humans. I put it to you that such insurance policies, while structured differently and not as profitable, still exist, especially in the vacuum the targeted resolution left. It would be a simple matter to offer a smaller payout and include other instances where a key worker leaves unexpectedly, such as injury, termination, or sabbatical. If the individual is important enough to insure against death, why not the others? Even if the insurance payout is less then a life insurance claim, any amount to offset the loss of the employee would be valuable.

"What's more, ambassador, the instances of key personnel leaving would still be low enough to make the exchange beneficial to all parties, as key individuals are less likely toleave, due to greater job security and the compensation that often follows, than nonessential personnel.

"Now, it's a simple enough practice, and I'm genuinely floored why you dismiss it so easily. I fear you've entered an organization full of nonhuman representatives with all kinds of systems of governance from a large list of alternate worlds and dimensions and even technology levels with a narrow-minded belief that likely stems from playing that online game Real Life^TM a little too long. I'll attribute your snark towards an ambassador trying to be helpful to that."

[Schutzenphalia and West Ruhntuhnkuhnland]

"A rather Jakusan approach to a not unreasonable issue, ambassador. This this is the same assembly where governments have refused to recognize any marriages so they don't have to recognize homosexual marriage, or that believe the Human Rights category doesn't apology to non-humans. I put it to you that such insurance policies, while structured differently and not as profitable, still exist, especially in the vacuum the targeted resolution left. It would be a simple matter to offer a smaller payout and include other instances where a key worker leaves unexpectedly, such as injury, termination, or sabbatical. If the individual is important enough to insure against death, why not the others? Even if the insurance payout is less then a life insurance claim, any amount to offset the loss of the employee would be valuable.

But the premiums on income protection insurance are much higher than on life insurance (if, as I already mentioned, you're even able to get it in the first place). So you couldn't cover the loss. This is really the only thing that matters.

"What's more, ambassador, the instances of key personnel leaving would still be low enough to make the exchange beneficial to all parties, as key individuals are less likely toleave, due to greater job security and the compensation that often follows, than nonessential personnel.

I don't understand what this has to do with income protection insurance, which wouldn't have anything to do with voluntary departures.

"Now, it's a simple enough practice, and I'm genuinely floored why you dismiss it so easily.

Because of basic financial common sense? And also because I have literally never encountered a case of this working.

It's disappointing that you've been suckered in by this red herring, because it's completely ridiculous. I will, though, continue to extend the offer: if anyone can provide a single, solitary example of this, I will happily withdraw my argument.

I fear you've entered an organization full of nonhuman representatives with all kinds of systems of governance from a large list of alternate worlds and dimensions and even technology levels with a narrow-minded belief that likely stems from playing that online game Real Life^TM a little too long. I'll attribute your snark towards an ambassador trying to be helpful to that."

This is exactly what I meant by that line from the Poetics before, and exactly what you failed to grasp. It doesn't matter what planet this takes place on. What dimension we're in. What species the person being insured is. The basic operation of the insurance industry is going to be the same regardless.

Consider it another way. Schutzenphalia and West Ruhntuhnkuhnland recently competed in the Olympics. The Olympics featured teams from a wide range of worlds and technology levels; our swimmers were beaten by sapient vulpines and our weightlifters by sapient bears. Yet at the same time, the basic rules of those sports did not change. When our cycling team was disqualified, we could appeal a ruling, or a technical issue; but we couldn't appeal because there happened to be a team of robots competing. There is at least one team of sapient ponies competing in the World Cup, in which we are also competing; yet the scoreline of that game will still be decided according to the normal rules of football.

Or an example from international law. If someone claims that their country enacts tariffs but that this has no effect on their international trade, I would not be inclined to believe them, even their nation was in every other respect highly realistic. If someone admitted that tariffs did affect their international trade, but that that trade was with subterranean aliens from the Moon, then I would believe them, despite the seemingly fantastical nature of the claim.

Arguments about species or technology or planetary location are relevant when they pertain to those specific issues: the reference to reference to "humans" in the proposal about livestock antimicrobials, for example. But I am perfectly happy to assume that the "Workers" in "Ban Profits on Workers' Deaths" are interdimensional time traveling aliens from the Horsehead Nebula: it would still not be a workable resolution!

Do you see the difference?

[Defwa]

I think part of the issue here is the author is suffering from a lack of understanding of how insurance works.
If it were like a savings account where you only got out what you put in then there would be no point in getting a policy for anyone because there would be no profit.

But actually, life insurance providers will calculate the premium based not only on the likelyhood of impending death and the amount of the final payout, but also the investment potential of the money that they receive via payments. Your payments don't sit in some bank account until you croak- they float around the stock market or grow in hedge funds. They get turned into mortgages and small business loans that become far larger amounts of money than they were at the beginning.
Thus it can easily be profitable for a company without an expansive finance division to insure its employees and profitable for the insurance company to make those policies.

The single fact that it is done proves that it is profitable and that in a climate where the national laws do not protect the poor and where taxes on insurance payouts remain lower than capital gains, it remains profitable to bet against the lives of your own employees.

OOC Here is another article about dead peasants policies. Its only a few months old and states that even with changes in the US tax code, dead peasant policies are still profitable and growing in usage. The policies are considered high level assets, which not only have the impact of long term profitability but also stabilize and boost corporate assets with the assurance of these long term payouts.

[Schutzenphalia and West Ruhntuhnkuhnland]

I think part of the issue here is the author is suffering from a lack of understanding of how insurance works.

I don't think that's the issue, no. It's that we're largely talking at cross purposes. You're talking about one country's lopsided tax code which creates a favourable environment for exploitative COLI policies. I'm saying that the legislation for the entire World Assembly shouldn't be solely decided by what the situation is in the US, given that the legislation applies to all COLI policies, including the common, and not exploitative, practice of keyperson insurance, which companies would pursue even without a tax benefit.

It's entirely possible that this resolution does solve a bad situation, which is what you're talking about. But if it creates an entirely separate bad situation, which is what I'm talking about, then there's still grounds for repeal. And it's those grounds that you're not really directing your argument against: in fact, I struggle to see how any of it rebuts the argument in the repeal.

The single fact that it is done proves that it is profitable and that in a climate where the national laws do not protect the poor and where taxes on insurance payouts remain lower than capital gains, it remains profitable to bet against the lives of your own employees.

So pass laws to redress that situation. But requiring that at least half of the payout on a keyperson policy go to people who haven't contributed 0.01 schreierzugetrankensmittelklopflauermarks to the policy has absolutely no bearing on that.

[Defwa]

I don't think that's the issue, no. It's that we're largely talking at cross purposes. You're talking about one country's lopsided tax code which creates a favourable environment for exploitative COLI policies. I'm saying that the legislation for the entire World Assembly shouldn't be solely decided by what the situation is in the US, given that the legislation applies to all COLI policies, including the common, and not exploitative, practice of keyperson insurance, which companies would pursue even without a tax benefit.

It's entirely possible that this resolution does solve a bad situation, which is what you're talking about. But if it creates an entirely separate bad situation, which is what I'm talking about, then there's still grounds for repeal. And it's those grounds that you're not really directing your argument against: in fact, I struggle to see how any of it rebuts the argument in the repeal.

So pass laws to redress that situation. But requiring that at least half of the payout on a keyperson policy go to people who haven't contributed 0.01 schreierzugetrankensmittelklopflauermarks to the policy has absolutely no bearing on that.

You were the one who brought up whatever country's tax code earlier in the discussion.
I was making my previous point because you put into the question the economic logic of such policies. I provided that logic. But you can change the subject, if you choose.

Telling nations to do something themselves is not a valid reason for a repeal such as this. Said action does not protect people of other nations who are being exploited in such a fashion. The 50% payout is not required in all cases. The insured may choose a beneficiary and the company may then charge the employee for that half. Its an additional option to decline and a negotiation tool, basically. Many companies and employees would be inclined to set up two separate policies- one based on corporate profit and another based on family needs. The company could be inclined to pay in part for the second policy because it creates an all or none situation

OOC: And something your misunderstanding about the multiverse is that if something happens in the US it means neither that it is necessarily happening here nor that it doesn't happen in any other nations here. The fact is it could reasonably happen.