1970s - Government Hearings - Snippets

  • Ernest J Moorhead (Jack). Second, belonging in the area of the actuary, there are questions about the reliability of dividend illustrations.
    • By reliability I am not referring to whether those dividend illustrations will be met in practice.
  • Senator Richard (Dick) Stone (FL-D).  Or whether they are on projections with the facts that are on hand at the time you make projections.
  • Mr. Moorhead.  Yes. whether all actuaries are following the same process in converting the same dividends into an dividend illustration of the policy.
  • Senator Stone. Well that is not the subject. You are not suggesting that the actuarial standardization be made a subject of regulation are you.
    • You are urging that a society of actuaries, the group itself, professionally do that.
  • Mr. Moorhead. Yes, I am. I am, I may say, in favor of minimum regulation and maximum encouragement by the regulators and the possible regulators for action on a voluntary basis.
    • In this matter I am discussing, the Society of Actuaries has gone a certain distance with a report that is in your hands.
    • I just think they haven't gone far enough, and that is a separate matter.
    • The third of the matters that belong in the actuarial field is the question-I'm not sure that I have heard it come up in this last day or so-whether the public can safely reply on that word "participating" as meaning what the buyer's guide says that it means, and what the insurance policy says that it means.

1975 1203 and 1204 - GOV (Senate) - Veterans Insurance Information Disclosure, Senator Stone (D-FL) - [PDF-989p-GooglePlay]

  • So what I am saying is that the Belth calculations cannot get out of a policy anything that isn't there already.
  • The premiums and the dividends and the amounts of insurance and the cash value are all there is to a policy.
  • You can fool around with them any way you like but mostly you can get at all the facts just by looking at basic things.

-- Julius Vogel (Prudential) 

1978 0807, 0814 and 0815 - GOV (House) - Life Insurance Marketing and Cost Disclosure, Congressman Moss (D-CA) - [PDF-826p-govinfo.gov]

  • We would have expected to find the NAIC employing its influence to dissipate the wholly unnecessary confusion that surrounds the term-whole life controversy. 
  • Regrettably, we find the NAIC at the forefront of efforts to perpetuate it.

1978 12 - GOV (House Report) - Life Insurance Marketing and Cost Disclosure Report Together with Dissenting Views, Congressman Moss (D-CA) - [PDF-106p]

  • During the course of....we ascertained that there were very few people within the Federal Government with an understanding of the insurance industry.  
  • A staff memo...stated: "It appears that for many years the workings of the life insurance business have been misunderstood by those at the [Internal Revenue Service and Justice Department] associated with the question.

--  John LaFalce (D-NY)

  • 1979 1011 and 1022 (Part 1) - GOV (House) - Small Business Problems with Insurance, John LaFalce (D-NY) Part 1 - 1979 1011/22  - [PDF-337-GooglePlay]

Moss Committee Report of 1978

  • The findings and conclusions, and this is the part that created the explosion, were that there is a shortfall of information, particularly with respect to ordinary life and that consumer experience does suggest that the consumer is not able to adequately determine the suitability of the product, the quality of the product, or the cost of the product.

As a consequence, consumers are sustaining losses, and this would be a definite indication of a market failure.

-- Jack E. Bobo, Executive Vice President of the National Association of Life Underwriters (NALU)-- NAIFA

1979 - SOA - Cost Disclosure (Moss Report), Society of Actuaries - 18p

  • 1978 0807, 0814 and 0815 - GOV (House) - Life Insurance Marketing and Cost Disclosure, Congressman Moss (D-CA)- [PDF-826p-govinfo.gov]
    • 1978 12 - GOV (House Report) - Life Insurance Marketing and Cost Disclosure Report Together with Dissenting Views, Congressman Moss (D-CA) - [PDF-106p]