Hawkwin: While I agree substantively with your points, my experience int eh real world is that most providers do exactly what Schwab has done as reported by the original poster. They really don't want to be bothered with having to perform different procedures to meet the requirements of each of the potential IRA rollover custodians. I worked at Schwab when this procedure was worked out, and our "competitive intelligence" (i.e. we called those with whom we had contacts - which was most of the major players and a lot of the smaller players - it being a small industry with a lot of people moving around - we've worked with someone who now is somewhere else...) and that seemed to be the concensus way of doing it.Yes, the "direct approach" is a sure fire way of accomplishing the rollover without any possibility of it ever being deemed not a real rollover, but the method of issuing the check payable to the IRA custodian is also sure-fire - absent someone forging a signature and cashing the check (unlikely, since a bank taking such a check would certainly be suspicious of a signature reading "USAA..."To be honest with you, my experience is that when dealing with some (not all) insurance company based service providers, getting money from them is more difficult. Lots more paperwork. Lots more time involved. Draw your own conclusions as to why.