Trends and Transitions: December 2010
Electric Cars Take Charge
Auto manufacturers are steering car buyers this year to the Chevrolet Volt and the Nissan Leaf. And electric models from BMW, Ford, Honda, Mitsubishi and Toyota are coming out in 2012. With the help of a one-time federal electric vehicle tax credit—ranging from $2,500 to $7,500—and 13 state tax credits and rebates, buyers are likely to be snapping up electric vehicles as soon as they come out.
Powered by rechargeable batteries, these vehicles can be plugged in at home or at public charging stations. Although they can travel 100 to 200 miles before needing to be recharged, it can take four to six hours to recharge them. Consumers may be shocked if they buy them but find few charging facilities available.
Twenty states have tax credits, grants or loans to promote the development of charging stations, which can be run by independent owners or local governments. Currently, most public charging stations are free. Owners have the option, however, to charge a fee for using them.
To help jump-start the market, Coulomb Technologies, along with Chevrolet, Ford and smart USA, announced last summer that it will deliver nearly 5,000 free home and public charging stations to Austin, Texas, Detroit, Los Angeles, New York, Orlando, Fla., Sacramento, Calif., the San Jose/San Francisco Bay Area, Redmond, Wash., and Washington, D.C. The program, ChargePoint America, is partly funded with a $15 million grant from the American Recovery and Reinvestment Act.
Electric vehicle infrastructure may have a long way to go, but it’s just a matter of time before electric cars light up our roads.
Where's the Money?
There’s a battle brewing over life insurance payout methods. Questions arose after Cindy Lohman, the mother of an Army sergeant killed in Afghanistan, had difficulty accessing his $400,000 life insurance proceeds because they were placed in a “retained asset account.”
Since 1982, life insurance companies have offered beneficiaries these accounts when they choose to receive the payment as a single lump sum. In the account, the money draws interest, and the beneficiary is supposed to be able to access the funds through a check or a draft book. They’re designed to be temporary, allowing beneficiaries time to decide what to do next.
There currently are more than 60,000 retained asset accounts in the U.S. Department of Veterans Affairs’s Group Life Insurance program.
But concerns are growing over how these accounts operate and whether consumers know the risks involved. When Lohman tried to use the “checks” to purchase a bed and a camera on two different occasions, the stores refused to accept them because they were drafts, not checks. Questions focus on the interest rates paid, the security and soundness of the money, and disclosures made by insurance companies.
Critics say insurance companies are not paying beneficiaries a fair interest rate and their money is not secure because it is not FDIC-insured. They also charge that beneficiaries are not given adequate information on how these accounts operate.
Insurance companies counter that the accounts earn interest at rates comparable to other similar accounts and are protected by state law through state insurance guaranty associations. Insurance companies also argue that they comply with all disclosure rules set by the National Association of Insurance Commissioners and the states.
Since 1991, insurance regulators in nine states thought regulatory rules and bulletins were needed to protect citizens. Colorado, Kansas, Kentucky, Nevada, New Jersey, North Carolina and North Dakota have specified what information, such as the account’s features and how the funds can be withdrawn, must be included in retained asset account disclosures.
Maryland allows insurers to settle a claim for life insurance proceeds through a retained asset account only if the beneficiary expressly consents to do so. Arkansas reviews these acccount programs on a case-by-case basis.
A bill currently in the California Legislature would require an insurer that uses a retained asset account to:
- Obtain prior written approval from the beneficiary or the claimant.
- Disclose that the beneficiary is not obligated to accept the retained asset account and may receive the proceeds in full.
- Disclose that the account is not FDIC insured, and if the insurer goes out business, the money could be lost.
- Pay all interest made, less any administrative fees, to the beneficiary.
A bill in New York would prohibit holding any life insurance proceeds in an insurer’s retained asset account.
The National Association of Insurance Commissioners is reviewing the use of retained asset accounts and whether appropriate consumer protections are in place.
A Real Steal
Identity theft generates more complaints than anything else received by the Federal Trade Commission. Credit card abuse was the most common form of fraud reported in 2009, followed by government benefits, phone or utilities, and employment fraud.
Every state has some kind of law regarding identity theft or impersonation. Twenty-nine states also have specific restitution provisions, and three states have forfeiture provisions, which prevent the thief from keeping any property obtained through the identity theft.
Eleven states have created identity theft passport programs to protect victims from ongoing problems. Among other things, passports identify holders as identity theft victims, protecting them from getting unfairly arrested or detained.
In 2010, as state legislatures continue to combat identity theft, several have expanded what constitutes identity theft.
Georgia added businesses as potential identity theft victims. In Illinois, an applicant for a building permit now commits identity theft if he knowingly uses the license numbers of contractors who do not work on the project.
Kansas clarified the definitions of what constitutes identity theft and identity fraud to include selling or purchasing identity information to commit fraud and using false information to obtain documents containing personal identifying information.
Virginia added the sale, distribution or release of personal identifying information to the definition of “injury to property” in their extortion law.
This year also saw more emphasis on protecting children from identity theft. Connecticut now requires the state’s Department of Children and Families to review every foster child’s credit report for evidence of identity theft, if they are 16 years old or older. Illinois enacted similar legislation last year requiring the state’s Department of Children and Family Services to conduct annual credit history checks of children placed under its guardianship, beginning when a child turns 12. And last year, Indiana increased the penalty to a Class C felony if a parent steals a child’s identity.
Top 10 States for Identity Theft Complaints
6. New Mexico
8. New York
Businesses On Top
CNBC’s list of America’s top states for businesses. And the winners are:
4. North Carolina
7. South Dakota
8.& 9. (Tie)
Note: To rank the states, the television business news channel used public data on 40 measures of competitiveness—in each of the following categories: cost of doing business, workforce, quality of life, economy, transportation and infrastructure, technology and innovation, education, business friendliness, access to capital and cost of living.