Change, No Damage?

What I noticed was there is a requirement for in-force illustrations, and people may have thought they bought one thing and whenever you have to give them an in-force illustration with a current disciplined scale, they're going to realize they bought something else.

I think many companies will have serious problems with policyholder retention.

  -- MARK J. GREENE

1995 - PRACTICAL ILLUSTRATIONS AND NONFORFEITURE VALUES, Society of Actuaries - 14p 

  • So if somebody could think of a way to get to the consumer without causing real problems among recent buyers, who are our most fragile customers, we would like to hear it.

-- John W. Keller,  Northwestern Mutual


1991 - 
Illustrations, Society of Actuaries - 20p

  • We can see why it would be confusing and difficult to explain… without eroding some confidence on the consumer's part.

-- Rachel (Texas)

2019 1115 - IULWG Conference Call - <Bonk>

  • Mr. Wright responded that he recognized this problem and saw also the problem of illustrating extremely complex products.
  • It was his personal view that it would require some significant changes in how products are illustrated.
  • The working group's concern was how to bring about a change without damage to the market place.

1993-4, NAIC Proceedings

  • He (ACLI - John Bruins) said the ACLI is concerned about the reaction that may be received from consumers when their policy illustration changes, even though no changes have been made to the product being illustrated.
  • He noted that several companies have indicated receiving negative reactions from policyowners when their policy illustration changed. 

2016-4, NAIC LATF 

I <Larry R. Robinson> am on this panel principally as Chairman of the ACLI Subcommittee on Cost Comparisons.

  • Much of our work has dealt with the issue of illustrating Nonguaranteed Elements.
  • As a backdrop, I want to quote from a January 1988 Financial Planning article.
  • The article is entitled "Future Shock" by Harry Lew with the sub-heading: "What will happen when a generation of insurance buyers begins comparing unrealistic illustrations with the actual performance of their policies?
  • Industry leaders would prefer not to find out.

1988 - ACTUARIAL OPINION ON NON-GUARANTEED ELEMENTS, Society of Actuaries - 12p

  • I sincerely believe we have a flawed instrument in today's sales illustrations.
  • ...we did not communicate the impact of change as well as ...we should have.
  • Our biggest mistake would be to delay.
  • I don't believe the consumer will tolerate or forgive us, let alone the regulators, if we do nothing.

--  Robert Nelson, chairperson of the National Association of Life Underwriters (NALU) Task Force on Illustrations - <Currently NAIFA>

1993 - SALES ILLUSTRATIONS - WE CAN'T LIVE WITH THEM, BUT WE CAN'T LIVE WITHOUT THEM!, Society of Actuaries