I look at it a little differently.
- The panel is saying that we should bring the level of language in the contract down to the present public comprehension.
- That is fine, but we are missing the point: the public doesn't understand what it is getting.
- So instead of bringing the language down to the public, should we not educate the public up to our standard, or at least somewhere between the two existing levels.
--MR. CRAIG W. LEWIS
1981 - THE LIFE INSURANCE BUSINESS---THE VIEW OF CONSUMERISTS, Society of Actuaries
"The "unbundling' of services and other product differences between Universal Life and Ordinary Life cause current literature to be inapplicable, as well as insufficient, for Universal Life."
1984 - American Academy of Actuaries - Journal
Mike Yanacheck - Words mean different things
-199x - let's make sure we're all talking about the same things
-AAA - literature doesn't work for UL
- I do think that analogy could lead you to some very incorrect conclusions.
- The principal one that I would address is the question of "honesty".
- There are advertisements for back-end loaded Universal Life products which say things such as, "A product in which there is no expense charge to the persisting policyholder".
- That language is artfully worded to convince the person who buys that there is no expense charge.
- That is obviously not the case in actuarial pricing.
- There are expenses and they will be amortized one way or another.
-- Thomas Eason
1983 - INDIVIDUAL LIFE INSURANCE, Society of Actuaries
Pursuing this thought further brings to light the fact that our nomenclature in this field is not only poor semantics but also far from precise.
-- RALPH E. EDWARD
1955 - ANALYSIS OF APPROXIMATE VALUATION METHODS , Society of Actuaries
- We have to get out of our mode of talking about these policies in language that can only be understood by the person who wrote the language.
- I find, after 30 years plus of experience in the life insurance business, that there is jargon used in illustrations that I don't understand.
- I can have difficulty in taking an illustration and figuring out what in the world the authors are trying to illustrate and how they are doing it."
-- Robert E. Wilcox - Chairman of the Life Disclosure Working Group (NAIC)
1994 -PROBLEMS AND SOLUTIONS FOR PRODUCT ILLUSTRATIONS, Society of Actuaries
- "Most common citizens just don't understand policy terms. You have to have faith," said he to his commissioner.
- "You have to have faith or trust that the agent is telling you the truth or explaining it correctly to you."
1993 - GOV - WHEN WILL POLICYHOLDERS BE GIVEN THE TRUTH ABOUT LIFE INSURANCE?: EXAMINING STATE REGULATIONS AND THE ADEQUACY OF INFORMATION AVAILABLE TO CONSUMERS OF LIFE INSURANCE
- William Koenig (Northwestern Mutual) suggested that the parties all needed a common understanding of the terms used in their discussion.
- As an example he gave the term "past performance" and asked if this meant past performance of the company or of the product.
- He emphasized the need to define terms like past performance in a way commonly used by the industry.
Meantime the policy contains all these many words presumably to make clear to the insured what the coverage is. We concede that all this verbiage is now “required” by law or regulation but is it essential?
Perhaps the new Committee on the Valuation and Non-Forfeiture Laws may find it desirable to say something about the relatively unintelligible verbosity of the policy contracts.
1973, The Actuary Vol 7 No 2
Surely some of the criticism about the complexity of the policy should be heeded by the industry.
At the Sept. 9, 1993, conference call of the actuarial task force, the members agreed that the actuarial task force will provide definitions needed relating to cost disclosure.
1994-2 NAIC Proc.
- I then said, "No, read the agreement. We're not going to ask for that kind of thing."
- I was prepared to say, although I couldn't commit us to this, that anything that was used up we never would ask them to pay for.
- Later we had a terrific argument over the difference between "used up" and "used."
- They translated the agreement into Russian using the word that we would have called "used," that is, not new.
- So, when we got into negotiations with them and said that they must return some things which were not "used up," they thought we were using the word "used."
- Therefore, they said, "Well, these have been used."
It wasn't until [Charles] Bohlen was in negotiations, and heard the Russian word that he turned to our side and said, "You know, you're not using the same word."
- Then he got the agreement out and found that the translation was wrong.
- The word "used" was in there instead of "used up.
- "Consumed" was our word; "lost, consumed or destroyed."
- “Consumed" was translated to them as "used."
This was one of the minor stumbling points of the negotiations that caused a long delay.
-- Oral History Interview with Michael H. Cardozo
Washington, D.C., May 29, 1975 - by Richard D. McKinzie