Churning

At a recent meeting of underwriters, Thomas Wheeler, a chief executive officer of Massachusetts Mutual, said in the last decade:

  •  "Some companies encourage churning",
    • meaning rolling over whole life business into universal life.

Not only did these companies swap high-margin products for low-margin ones, they often incurred additional acquisition costs.

Do you agree with Mr. Wheeler's remarks?

--  Senator Howard Metzenbaum - Ohio

1993 0525 -  GOV - When Will Policyholders Be Given The Truth About Life Insurance?

  • [PDF-354p-GooglePlay, No Video]->Not on govinfo.gov 
  • Senate - COMMITTEE ON THE JUDICIARY -  SUBCOMMITTEE ON ANTITRUST, MONOPOLIES AND BUSINESS RIGHTS

7. Consider Charges for 1997 and 1998

  • 3. Make recommendations for new models or changes to existing NAIC model laws or regulations to address issues related to problems of churning.

1996-4V2, NAIC Proceedings

  • Churning will be high as comparisons of recent performance and illustrations will “prove” the necessity for a switching. (p6)

-- Dale R. Gustafson

...asks why the really hard questions about the product aren’t reflected in the articles we printed. His nominees for the hard questions are:

1981 11 - The Actuary, Society of Actuaries