Howard Metzenbaum

  • Howard Metzenbaum - (D-OH)
    • Senator - 1974, 1976–1995
    • Ohio House of Representatives and Senate - 1943 to 1951
  • Why is this flimflammery allowed to continue?
  • Where are the laws to prevent companies from misleading people?  

--  Senator Metzenbaum

1993 - GOV (Senate) - When Will Policyholders Be Given The Truth About Life Insurance? - [PDF-354p]

First to comment was Sen. Howard Metzenbaum (D-Ohio):

  • He cited a report issued by the NAIC 13 years ago that reached many of the same conclusions, but the disclosure system it found to be "seriously flawed" was still in place today.

1993-3, NAIC Proceedings

  • 1979 0524 - GOV - Cost Disclosure in Life Insurance - Metzenbaum - 279p
  • 1991 0612 - CSPAN - Press Club - Insurance Insolvencies
  • 1992 0623 - GOV - Consumer Disclosure of Insurance - [PDF-323p]
  • 1993-Vol. IB, NAIC Proceedings - Metzenbaum Letter  p810-811 - 2p
  • 1993 - GOV (Senate) - When Will Policyholders Be Given The Truth About Life Insurance? - PDF-354p
  • 2002 07 - GOV (Senate) - Corporate Responsibility
    • [PDF-p, VIDEO-CSPAN]
    • Metzenbaum
    • Senate - Commerce, Science,and Transportation Subcommittee on Consumer Affairs, Foreign Commerce & Tourism
  • 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, p2

When will

Sioux City Journal from Sioux City, Iowa · 14

Almost 1 year ago, I chaired a hearing in this room looking at sales practices in the life insurance industry.

  • That hearing did not make the network news and was not broadcast by C-SPAN.
  • Put bluntly, it was a pretty dull hearing.  (p1)

--  Senator METZENBAUM

1993 - GOV (Senate) - When Will Policyholders Be Given The Truth About Life Insurance? - PDF-354p

Opening Statement of Senator Metzenbaum

Today the Subcommittee on Antitrust and Monopoly begins its examination of cost disclosure in life insurance.

Life insurance is a tremendous business in this country.

  • Americans carry 140 million ordinary life policies, with nearly $1.3 trillion in coverage.
  • Cash-value life insurance accounts for more than 20 percent of total savings in this country-second only to deposits in savings and loan institutions.

The business of life insurance is presently exempt from the Federal antitrust laws under the McCarran-Ferguson Act.

  • It is the only major financial business without Federal regulation.
  • This is a unique situation.

It is fair to ask how well has the industry operated under this system.

  • Do consumers of insurance enjoy the benefits of competition?
  • Are consumers able without heroic efforts to find the best coverage for their needs at the lowest cost?
  • And are consumers able to readily understand precisely what kind of coverage they are buying?

My staff has conducted a major investigation of these issues.

  • I must say today that I was shocked when I saw its findings.  (p1)

1979 - GOV (Senate) - Cost Disclosure in Life Insurance - Senator Metzenbaum - [PDF-279p-GooglePlay]

I think any way that we can make illustrations more understandable to the public is certainly going to help us.

  • We've seen the problems that have occurred when Senator Howard Metzenbaum (D--OH) was given an illustration with a vanishing premium, and he had absolutely no idea that he had bought a policy <Executive Life> that was not paid up in four years.
  • It caused many problems for the industry; it caused many problems because the press got involved, and the press doesn't understand the products as well as it thinks it does.

-- Linda M. Lankowski

1995 - SOA - Practical Illustrations and Nonforfeiture Values, Society of Actuaries - 14p

  • <Bonk: Connect with:
    • Legal Case - Video - 15-16740 Kamies Elhouty v. Lincoln Benefit Life Company -  Judge: there used to be cases...>
      • I think that one problem, even with the illustration disclosure, is that you are still not controlling what the agent actually says to the client, even when he or she sees that illustration. 
      •  I've been in many situations where our agent says, "I sold them a ten-pay contract and it was paid up in ten years," and I say, "It's not paid up."
      • I don't know how you can handle the idea of the agent telling somebody that it's a paid-up contract when it really was a vanishing-premium-concept contract.

      --  Susan Oberman Smith

      1995 - SOA - Practical Illustrations and Nonforfeiture Values, Society of Actuaries - 14p

  • 1999 - LC - Richard DUHAIME, et al., Plaintiffs, Appellees, v. John Hancock Mutual Life Insurance Company, et al., Defendants, Appellees, Howard M. Metzenbaum, Appellant. - No. 98-2139. - Decided: June 28, 1999, United States Court of Appeals, First Circuit
    • 1:96-cv-10706
  • Corporate Responsibility - [VIDEO-CSPAN]

1991 0612 - Insurance Insolvencies - [VIDEO-CSPAN]

Sen. Metzenbaum, known for his contentiousness on the floor of the Senate, addressed a luncheon audience at the National Press Club.

  • He discussed the recent spate of financial crises in the insurance industry, such as the financial collapse of Executive Life Insurance company, which has left hundreds of thousands of policy holders in California and New York unsure of the state of their insurance coverage. 
  • Sen. Metzenbaum criticized state insurance regulators for failing to adequately maintain knowledge of the financial affairs of the insurance agency.
    • He claimed insurance laws written by the insurance industry, inadequate staffing, infrequent examinations, inadequate capital regulation, and lack of coordination between the states are the reasons for the instability of the insurance industry.
  • He recounted several “accounting gimmicks” used by the insurance industry to appear financially solvent despite true financial instability
  • Senator METZENBAUM: Do you think these things are going to happen soon?
  • Judy Faucett (SOA/AAA-Actuary): Well, I certainly hope they are going to happen in my lifetime.



  • I hope you have a long lifetime, but I sure hope that the insurance industry moves a lot faster than that, and I am not even talking about my lifetime.
  • I think yesterday was too late.
  • I think that for this industry to be guilty of such reprehensible
    practices and to sit on their hands and do nothing I just believe it is incredible.
  • The only reason they don't do something about it is because the American people don't know about it.
  • I am hopeful that as a result of these hearings they will know more, but I am a realist enough to know that 1 day's news story or commentary, or whatever, with respect to radio or TV does not cause these impregnable companies to move very rapidly.
  • I think it is shameful.
  • In your professional opinion, will this situation get worse for consumers if your recommendations are not adopted by the industry?

Ms. FAUCETT: I don't know that it will get worse, but certainly it will not get any better.

1992 0623 - GOV (Senate) - Consumer Disclosure of Insurance - Senator Metzenbaum (D-OH)

  • [PDF-323p-GooglePlay, VIDEO-?]->Not on 
  • Senate - Committee on the Judiciary - Subcommittee on Antitrust, Monopolies, and Business Rights
  • ....on concerns relating to the adequacy of financial disclosures made in connection with the purchase of whole life insurance policies.
  • Furthermore, the NAIC was being pushed by Senator Howard Metzenbaum who wanted to accuse the regulatory structure of not doing its job and then to bring regulation up to the federal level 

-- Frank S. Irish (ASB - Actuarial Standards Board)

1996 - SOA - Professional Standards Affecting Life Actuaries, Society of Actuaries - 18p

1994 0120 - NAIC Legislative Outlook and Update

(p9) - Senator Howard Metzenbaum (D-OH) who has reintroduced legislation to create federal regulatory agency responsible for insurance is in his final months in office.

  • Last year the Ohioan announced that he would not run for reelection in 1994.
  • He also introduced 1619 the Insurance Protection Act of 1993.
  • While Senator Metzenbaum has used his chairmanship of the Judiciary Subcommittee on Antitrust Business Rights and Monopolies to examine number of insurance-related issues including life policy illustrations, assumption reinsurance and guaranty finds his subcommittee does not have jurisdiction over insurance. 
  • The subcommittee that does have jurisdiction the Commerce Science and Transportation Subcommittee on Consumer has not announced any plans for hearings on the Metzenbaum bill. Indeed Senator Richard Bryan D-NV that panels chairman will probably wait to see what action if any the House might take on insurance regulation.
  • With strong possibility of congressional hearings looming in the background Senator Metzenbaum has written to the Securities and Exchange Commission SEC regarding the sales
    practices of the Metropolitan Life Insurance Company.
  • Senator Metzenbaums letter of December 17 is at Attachment number of states are examining the marketing of life insurance products as if they were retirement pension plans.
  • Indeed the NAIC has formed the EX Special Committee on Metropolitan Life to pursue these issues Senator Metzenbaum had planned to hold hearing on this issue on January 24 but has canceled it for later date.
  • His staff contemplates hearing with company officials as well as state insurance regulators testifying.

I will tell you what we do need.

  • We need the insurance industry to step up to the bar, to step up to Congress, and say "Look, we know there are problems and this is what we will do or what we suggest you do.?"
  • What they are saying is, "We are running away from the problem. The industry is strong.

The industry is not that strong, and State regulation is a failure.

  • It is not working.
  • The insurance regulators-some are good but there are some exceptions.
  • The fact is that the State regulators, first of all, do not have the knowledge to do that which has to be done in connection with this industry.
  • They are not that well staffed, and they are not going to get that well staffed overnight.

Second, I am not sure that they have the resources to do so.

I say to you, Mr. Chairman, I believe that Congress has to deal with this problem promptly.

  • This subject has a sense of urgency about it.
  • There is no more powerful economic industry in the Nation than the insurance industry.
  • They have an impact upon the entire economy of this country, and I think that we all ought to be working together.  (p122)

-- Senator Howard Metzenbaum (0507)

1991 - 0227, 0507/0923 - GOV - Insurance Company Solvency

    • [PDF-369p-GooglePlay, No Video] ->Not on 
  • 1992 - GOV - Senate Document No. 19 -