4 - Illustrations

NAIC - Current / Recent Working Groups

11/14-15/2014 LATF 6-63  

Anthony Ferraro (New York Life) said that one of the goals of the Life Insurance Illustrations Model Regulation (#582) is to make sure that illustrations do not mislead consumers.
He emphasized that it is important that the accumulated cash flows that the customer sees in the illustration are supportable by the company.

8/16/2015 LIAC CC   Birny Birnbaum (Center for Economic
Justice—CEJ)  said it is important that state insurance regulators determine if illustrations are accomplishing what they are intended to accomplish, how they are being used and whether consumers understand them.
Mr. Birnbaum also suggested that illustrations should be consumer-tested
  • He <Birny Birnbaum> disagreed with Mr. Lovendusky <ACLI>  that an accompanying illustration would reduce the complexity of products for consumers.
    • He said illustrations add to the complexity.

2017/11/16 - LIIIWG CC, Richard Wicka, Chair, 2017-3, NAIC Proceedings

 Mr. Foley responded that, if consumers want to compare policies, they have the illustrations to do so.

1999-4,  NAIC Proc.

These policy illustrations were created by five different companies as a tool for selling the same 45-year-old man $300,000 worth of life insurance to protect his family financially when he dies. But the only thing that these five illustrations have in common is that none of them disclose enough information.

For example, Alexander Hamilton's illustration doesn't make it clear that there is no guaranteed death benefit after 12 years. How absurd can it be? That means that at age 57, this 45-year-old man will quite possibly have to pay a lot more to get new life insurance, if he can get it at all. Frankly, no 45-year-old man can make an informed choice about which policy to buy on the basis of any of these illustrations. 

--  Senator Howard Metzenbaum

1992 - GOV - Consumer Disclosure of Insurance, page 2

1994  - LOOKS CAN BE DECEIVING, Chicago Times