Pacific Life

  • John C. McCone (Board / CIA Director)
  • Thomas S. Sutton 
  • Bill Hezzelwood
  • With respect to guardrails, Pacific Life believes that it is critical that any proposed limit on the illustration of benefits be derived from sound principles and reasonable assumptions.
  • This methodology will help regulators best target changes to AG 49.

2019 0906 - NAIC - LATF - Pacific Life to NAIC LATF (Fred Anderson), 2019-3 (p6-319)

  • (p258) - Statement of Tom Sutton, Chairman and Chief Executive Officer of Pacific Mutual Life Insurance Co., On Behalf of the Council of Life Insurance (ACLI)
    • We have already seen the effects of underpriced products in the market place, where Executive Life was taking away the business of more prudently managed companies by illustrating or guaranteeing unrealistic interest rates.
    • One current example is that Pacific Mutual was one of the losing bidders on the Pacific Lumber annuity case that you just heard about.
    • Regarding Executive Life's strategy, Pacific Mutual and others in the industry have had a high level of concern which was dismissed by some regulators at that time as competitive sour grapes.
    • Second, Executive Life, together with others in the Milken daisy chain, had substantial lobbying power in Sacramento.
      • For example, last year I testified in favor of a legislative limit on below investment grade securities before the California assembly insurance and finance committee.
      • Intense lobbying by those opposed to such a limit led to only 4 affirmative votes out of a committee of more than 20.
    • Could we have done more at the time?
      • Perhaps, but the combination of financial euphoria and political clout would have made success extremely difficult.

1991 0227, 0507, 0509 and 0523 - GOV (House) - Insurance Company Solvency, (CSPAN) Insurance Company Insolvencies, Cardiss Collins (D-IL)  ---  [BonkNote]  ---  [PDF-369p-GooglePlay,  VIDEO-0509-CSPAN

  • Senator BRYAN. Are we likely, Mr. Sutton, to see other insurance company failures, life insurance company failures?
  • Mr. SUTTON. Yes.

  • Senator BRYAN. Is the concept of a disclosure offensive to you, assuming that you could get a disclosure that is not so highly technical as to be actually meaningless? But I mean, is the concept of full disclosure at the point of sale, assuming that you could get something that is more understandable than the complexities might permit it to be? You can be so complex that nobody is going to read it, and those that do --
  • Mr. SUTTON. My personal opinion is that I would not have any problem with a kind of disclosure that could be communicated simply, but was based on extensive analysis by someone capable of making the appropriate analysis.
    • I would not like a simplistic disclosure that could cause great dislocation because it did not recognize all of the factors in what is, in fact, a very complicated business. - (p280)

1991 0227, 0507, 0509 and 0523 - GOV (House) - Insurance Company Solvency, (CSPAN) Insurance Company Insolvencies, Cardiss Collins (D-IL)  ---  [BonkNote]  ---  [PDF-369p-GooglePlay,  VIDEO-0509-CSPAN