Range Approach

  • 1988-2, NAIC Proceedings, ACLI Advertising MR range approach,  MARKET CONDUCT SURVEILLANCE Task Force - 3p
  • 1988 12 - Two approaches to life insurance cost illustrations, Society of Actuaries - 4p

ATTACHMENT TWO - STATEMENT ON BEHALF OF THE AMERICAN COUNCIL OF LIFE INSURANCE TO THE NAIC MARKET CONDUCT SURVEILLANCE (EX3) TASK FORCE, June 13, 1988

My name is Anthony T. Spano

  • Our proposal involves a method known as the "range" approach.
  • provide illustrations based on different assumptions.
  • This would serve to demonstrate to the consumer the effect on future benefits of changes in assumptions.
  • Also, illustrations based on other than the company's current scale can provide particularly useful and timely information if a change in experience is anticipated.

1988-2, NAIC Proceedings

5. Report of Subgroup on Life Advertising Issues

  • Dick Rogers, as chair of the subgroup, called upon Tony Spano (American Council of Life Insurance) to speak to amendments to the NAIC Model Rules Governing the Advertising of Life Insurance.
  • Mr. Rogers noted that amendments to the model had been adopted in December 1987 but that technical amendments were expected.
  • Mr. Spano submitted a written report entitled "Statement on Behalf of the American Council of Life Insurance to the NAIC Market Conduct Surveillance (EX3) Task Force, June 13, 1988" (Attachment Two).  Mr. Spano summarized the report stating that the amendments he proposed (attached to his report) involve a method known as the "range approach" which would govern the use of sales illustrations.
  • Mr. Rogers thanked Mr. Spano for his report and moved that the report be received and that the amendments be submitted for exposure at this time for consideration at the December 1988 national meeting.
  • Without further discussion, the motion passed unanimously.
  • The task force then heard from William Albus (National Association of Life Underwriters) who commented that if the so-called "range approach" were adopted, it would not necessarily be beneficial.
    • While he asked to reserve further comment as the proposal is further considered, the
      NALU was opposed to the amendments.
    • However, Mr. Albus noted his support for the current model and support for its continued adoption in the jurisdictions.