[draft] Ban Profits on Workers’ Deaths

[Manticore Reborn]

The question then becomes, is there a "moral hazard" issue that needs to be addressed that isn't covered by Resolution #7?

Regardless of any "moral hazard" the issue may create, I do not believe it is in the purview of this august body to legislate morality.

...Is it ethical for a corporation to take out secret whole-life insurance policies on its workers, so that the corporation benefits from those workers' deaths? Should the workers have knowledge of this insurance policies? Should they be able to decline permission? Should a corporation be able to fire or not employ a person based on their decision whether or not to allow the corporation to take out a life insurance policy on them? Those are the questions here.

In short, my answers are : no, yes, yes, no. Perhaps an outright ban on COLI policies is not needed, but the World Assembly has the authority and, in my opinion, the responsibility to ensure that corporations are not abusing their employees.

The government of the Kingdom of Manticore Reborn agrees with the esteemed Dr. Castro from The Commonwealth of Glen-Rhodes on the actual crux of the issue. However, we are not entirely in agreement on the rights of the workers. We do not feel that workers should have the right to decline permission for employers to insure them. We further agree that it is the responsibility of this august assembly to ensure businesses are treating their employees honorably.

The humble representative from the Kingdom of Manticore Reborn yields the floor.

[Glen-Rhodes]

We do not feel that workers should have the right to decline permission for employers to insure them.

Considering that this proposal would undoubtedly seek to grant such a right, what are your reasonings to not allow employees to decline permission?

- Dr. B. Castro

[Manticore Reborn]

We do not feel that workers should have the right to decline permission for employers to insure them.

Considering that this proposal would undoubtedly seek to grant such a right, what are your reasonings to not allow employees to decline permission?

- Dr. B. Castro

My government is of the belief that there can be significant costs involved with training employees, as well as pension benefits, stock redemption, etc... and that companies should be able to insure against these costs.

This ambassador would like to point out that this question could be reversed asking why an employee should have that right?

The humble representative from the Kingdom of Manticore Reborn yields the floor.

[Glen-Rhodes]

My government is of the belief that there can be significant costs involved with training employees, as well as pension benefits, stock redemption, etc... and that companies should be able to insure against these costs.

Is profit from selling a service or product not the source of revenue for corporations? Insurance benefits are paid out at the death of a person. Profit recoups costs long before then, in most cases. In fact, the profit generated by the entire group of employees is bound to cover the costs of the fraction that happen to die before surpassing their costs to the company in profit. There is really no reason to have COLI policies on every single employee.

For key employees, such a CEOs, COLI policies make more sense, since those employees are not easily replaceable and the losses to the corporation can be quite large, especially if traded in a stock market. But they should go no further. After key employees, the only motive is profit, not protection.

This ambassador would like to point out that this question could be reversed asking why an employee should have that right?

For the obvious reason that the policies are taken out a person's life. An employee ought to have control over who benefits from their death. There is nothing more personal than life, and consequently death. Could I reasonably and ethically take out an insurance policy against you, without your permission, to hedge against the costs of using my time to participate in a debate with you? Or would you feel in some way violated?

- Dr. B. Castro

[Sanctaria]

This Ambassador feels the need to point out that it's Life Assurance. Insurance is to cover for something that might happen, while Assurance is to cover for something that is certain to happen.

You are going to die, albeit eventuallly, therefore it's assurance, not insurance.

Yours.,

((Well, that's what it is in Ireland, although I think in the US, they use Insurance. But, in experience from having family members in the banking industry and from myself studying Law, including Business and Corporation Law, that it's assurance, not insurance. Nothing really big, but still. Best to be correct, non?))

[The Eternal Kawaii]

Even the most evil of corporations is unlikely to kill its workers to get a payout from a COLI policy.

You've obviously never done business with some Antarctic Oasis corporations we've had dealings with. Trust me, these folks would run over their grandmothers for an extra percentage point on their third-quarter capital gains.

[Nullarni]

I do not see why this is bad. Why should it be banned? If the corporation is paying for the policy and is not causing the death of the employee, nothing wrong is taking place.

Its not profiting on death, it is being compensated for the loss of an asset. If this were not the case the corporation would not be able to take out the policy. Besides, if the corporations easily make profits on theses policies, why would the insurance companies be willing to repeatedly offer them and just take the hit?

This sounds like something that would self-regulate. There is no reason for legislation at the inter-national level. We will not be supporting this.

[Embolalia]

This Ambassador feels the need to point out that it's Life Assurance. Insurance is to cover for something that might happen, while Assurance is to cover for something that is certain to happen.

You are going to die, albeit eventuallly, therefore it's assurance, not insurance.

Yours.,

((Well, that's what it is in Ireland, although I think in the US, they use Insurance. But, in experience from having family members in the banking industry and from myself studying Law, including Business and Corporation Law, that it's assurance, not insurance. Nothing really big, but still. Best to be correct, non?))

OOC: We do call it insurance in the States. Also, just as a nit pick in defence of my RL nation's terminology, you won't always die. At least, not always within your insurance. "Term life insurance" is basically a hedge against you dying within the term. In other words, you have the insurance for a certain period of time, and then it expires. If you expire after it does, you don't get money. Bit of a rip, if you ask me.

Even the most evil of corporations is unlikely to kill its workers to get a payout from a COLI policy.

Well, the most evil probably would. But the only averagely evil might not put as much money into worker safety if it has something to gain from the death of said workers. The wonders of cost/benefit analysis...

[Manticore Reborn]

Even the most evil of corporations is unlikely to kill its workers to get a payout from a COLI policy.

Well, the most evil probably would. But the only averagely evil might not put as much money into worker safety if it has something to gain from the death of said workers. The wonders of cost/benefit analysis...

But as previously stated, neglecting worker safety would be a violation of World Assembly Resolution #7 the Workplace Safety Standards Act.

[Morlago]

You have the full support of Morlago.

[Glen-Rhodes]

Its not profiting on death, it is being compensated for the loss of an asset.

The use of such despicable terms to describe a person's life aside, how much of a loss is a rank-and-file employee? There are obviously benefits and reasonable explanations for COLI policies taken our for key employees, such as a President of a board or the CEO, because the unexpected loss of those persons will likely have significant monetary impacts. But the man in the assembly line will not cost the corporation tens of thousands of dollars (or whatever currency you will). The motivation for taking out COLI policies on these individuals -- without their knowledge and consent, mind you -- is pure profit, not hedging the risk of losing them as an employee.

On an aside, Ambassador Saint-Clair, should you decide to go with my suggestion on how to write this proposal, I would additionally propose a ban on whole life insurance policies. (Whole life meaning that benefits are paid out even after the person is no longer an employee.)

- Dr. B. Castro

[Nullarni]

Its not profiting on death, it is being compensated for the loss of an asset.

The use of such despicable terms to describe a person's life aside, how much of a loss is a rank-and-file employee? There are obviously benefits and reasonable explanations for COLI policies taken our for key employees, such as a President of a board or the CEO, because the unexpected loss of those persons will likely have significant monetary impacts. But the man in the assembly line will not cost the corporation tens of thousands of dollars (or whatever currency you will). The motivation for taking out COLI policies on these individuals -- without their knowledge and consent, mind you -- is pure profit, not hedging the risk of losing them as an employee.

On an aside, Ambassador Saint-Clair, should you decide to go with my suggestion on how to write this proposal, I would additionally propose a ban on whole life insurance policies. (Whole life meaning that benefits are paid out even after the person is no longer an employee.)

- Dr. B. Castro

Like I said previously, in order to take out a policy you have to find an insurance company willing to actually sell you the policy. If a corporation were to make a profit on insuring its employees the company that insures them would loose profits and thus not be willing to sell any more policies. It fixes itself. This is simply an absurd demonization of corporations and insurance companies.

[Flibbleites]

I have to wonder, is this such really such a huge problem that the WA needs to get involved?

Bob Flibble
WA Representative

[Glen-Rhodes]

Like I said previously, in order to take out a policy you have to find an insurance company willing to actually sell you the policy. If a corporation were to make a profit on insuring its employees the company that insures them would loose profits and thus not be willing to sell any more policies. It fixes itself. This is simply an absurd demonization of corporations and insurance companies.

This isn't a monetary issue. It's an issue of ethics. Benefiting off of the death of an employee is not ethical. The World Assembly has the imperative to prevent such practices, if not by outright banning them, then by making them do what they are intended to do: protect against significant losses. Removing tax exemptions would be the best deterrent, but we cannot legislate on the tax systems of nations. So, the next best way to deter the unethical use of COLI policies is to outlaw them being taken out on rank-and-file, monetarily inconsequential employees. The compromise between the laissez-faire approach and the complete ban approach is to remove the secrecy of COLI policies. Shed sunlight on them and allow employees to decline permission.

I have to wonder, is this such really such a huge problem that the WA needs to get involved?

These questions really are definitely unanswerable. I personally believe that the practice is no smaller a problem than any other problems human rights resolutions address. To those of us that oppose secret COLI policies, it is a violation of privacy, dignity, and control over one's own life and who benefits when that life is over.

- Dr. B. Castro

[Nullarni]

Like I said previously, in order to take out a policy you have to find an insurance company willing to actually sell you the policy. If a corporation were to make a profit on insuring its employees the company that insures them would loose profits and thus not be willing to sell any more policies. It fixes itself. This is simply an absurd demonization of corporations and insurance companies.

This isn't a monetary issue. It's an issue of ethics. Benefiting off of the death of an employee is not ethical. The World Assembly has the imperative to prevent such practices, if not by outright banning them, then by making them do what they are intended to do: protect against significant losses. Removing tax exemptions would be the best deterrent, but we cannot legislate on the tax systems of nations. So, the next best way to deter the unethical use of COLI policies is to outlaw them being taken out on rank-and-file, monetarily inconsequential employees. The compromise between the laissez-faire approach and the complete ban approach is to remove the secrecy of COLI policies. Shed sunlight on them and allow employees to decline permission.

- Dr. B. Castro

If the corporation is not making money off of the employee's death and in fact losing money in taking out the policy, how are they benefitting off of the death?

I do not see insuring assests as being unethical. And as a side note, if your employment is making the corporation money, you are an asset to the company.

[Glen-Rhodes]

If the corporation is not making money off of the employee's death and in fact losing money in taking out the policy, how are they benefitting off of the death?

If a corporation does not benefit off of COLI policies, then they would not exist and we would not be talking about them right now.

I do not see insuring assests as being unethical. And as a side note, if your employment is making the corporation money, you are an asset to the company.

The idea that a person could be considered an asset is a uniquely capitalistic idea. Others of more fair ideologies tend to put the individual before the corporation. I doubt that our different views are reconcilable.

- Dr. B. Castro

[Nullarni]

If a corporation does not benefit off of COLI policies, then they would not exist and we would not be talking about them right now.

Well, you answered your own question:

"For key employees, such a CEOs, COLI policies make more sense, since those employees are not easily replaceable and the losses to the corporation can be quite large, especially if traded in a stock market."

This is exactly what they are used for. They aren't for lower down employees, because they would in no way bennifit from it, nor would they profit from it.

The idea that a person could be considered an asset is a uniquely capitalistic idea. Others of more fair ideologies tend to put the individual before the corporation. I doubt that our different views are reconcilable.

In communism the individual is considered an asset to the collective as a whole. I see little difference.

[Glen-Rhodes]

This is exactly what they are used for. They aren't for lower down employees, because they would in no way bennifit from it, nor would they profit from it.

Then explain why corporations do take out such policies.

In communism the individual is considered an asset to the collective as a whole. I see little difference.

Communism is no better in its treatment of individuals than capitalism. I am not a communist.

- Dr. B. Castro

[Newmanistan]

What about nations that have banned the insurance industry?

Now you're making them welcome it by this possibilty. Tighten this up, and you can be ok, with some kind of clause that says it doesnt apply in nations where insurance, altogther, is banned.

[Nullarni]

This is exactly what they are used for. They aren't for lower down employees, because they would in no way bennifit from it, nor would they profit from it.

Then explain why corporations do take out such policies.

Thats my point. They do not take out such policies, except in cases of companies trying to cheat on taxes... Which is already illegal, in most countries.

[Glen-Rhodes]

Tighten this up, and you can be ok, with some kind of clause that says it doesnt apply in nations where insurance, altogther, is banned.

A proper suggestion that is welcomed with agreement. Like the WA Copyright Charter, this proposal could only apply to nations that allow life insurance in the first place. Such is a common practice, when dealing with specific products and services.

Thats my point. They do not take out such policies, except in cases of companies trying to cheat on taxes... Which is already illegal, in most countries.

You are developing a habit of making broad assertions without any sources. It is difficult to carry out a debate with you, when you argue like this. If you don't believe corporations take out COLI policies on rank-and-file employees, then vote against this when it reaches the floor. Otherwise, denying reality or opposing because your nation is perfect in the regard is not useful to this proposal during the drafting stage.

- Dr. B Castro

[Manticore Reborn]

This isn't a monetary issue. It's an issue of ethics.

The esteemed Dr. Castro is correct, this is an ethical issue and it is the considered opinion of my government that the WA should not legislate ethics.

As previously stated, this is really a self regulating issue. If there is no profit to be gained, no company will look to insure its workforce in this manner. In addition, even if the company were to insure their rank and file workers there is nothing that could be done to force collection on those policies that is not already illegal.

The government of Manticore Reborn cannot support an outright ban on this practice. However, we do agree that when these sort of policies are purchased, employees should be informed and perhaps recompensed in some manner.

The humble representative from the Kingdom of Manticore Reborn yields the floor.

[Bears Armed]

"If this proposed resolution passes then corporations within WA member nations would still be allowed to place bets on whether those employees live through a certain period or die during it, yes? Hr'rmm, I think that I see a potential new international market for my homeland's thriving Gambling industry..."


Borrin o Redwood,
Chairbear, Bears Armed Mission to the World Asembly.


^_^

[The Altani Federation]

After reviewing this draft, the Altani Federation must regretfully decline to support it. We feel that individual nations are perfectly capable of protecting their workers, especially given already existing WA legislation. We also feel that this is not a widespread enough issue to mandate legislation covering every WA nation. In addition, this draft, if passed, would pose the potential for harming our economy. We would prefer to see legislation that manages the circumstances and conditions under which corporations can insure their employees, rather than an outright ban, if indeed this Assembly does feel it must do something in this regard.

- Yūsuf al-Shishakli, Acting Federation Ambassador to the WA

[Sionis Prioratus]

We would prefer to see legislation that manages the circumstances and conditions under which corporations can insure their employees, rather than an outright ban, if indeed this Assembly does feel it must do something in this regard.

- Yūsuf al-Shishakli, Acting Federation Ambassador to the WA

That is what shall be pursued, we assure you. No more outright bans, our first concession.

We shall wait for the final results of the current resolution at vote, to retake on this draft. We must say we are gratefully impressed by the response this idea/draft generated, which only makes us want to pursue it more vigorously & precisely, soon.

Yours truly,