Reasonable

  • The number one perceived problem is that buyers simply do not understand the nonguaranteed nature of life insurance illustrations.
    • Also, it is impossible for the average buyer to judge the reasonableness of the assumptions underlying the numbers in the illustration. 

--  John W. Keller, Northwestern Mutual

1991 - SOA - Illustrations, Society of Actuaries - 20p

  • Another issue mentioned was actuarial integrity or ethics. --  It might help to use an analogy.
  • Trying to assess the relative aggressiveness or integrity of illustrations is similar to determining whether people on a highway are driving at a reasonable and proper speed.
    • Driving between 50 and 70 miles per hour may be reasonable and proper, but there is still quite a difference in speed.
    • They will arrive at their destination at very different times.
  • Applying this example to illustrations, we can construct them with integrity and still not have something meaningful for Type B purposes, because there will always be too much variation in what is reasonable and proper.

--  John R. Skar, Fidelity Mutual

1991 - SOA - Illustrations, Society of Actuaries - 20p

  • Commissioner David Lyons (Iowa) asked Ms. Faucett to describe the quotation by her that had recently appeared in the New York Times.
    • She said she was quoted as saying that if you put 10 actuaries in a room you would get 40 conclusions about what the numbers they were examining meant. 
    • She thought it was important for buyers to see how the policy would work but the current approach of the working group would not allow that to happen.
    • Ms. Faucet responded that people spend more time buying a microwave than they do an insurance policy.
    • [Bonk: Ms. Faucett = Judy Faucett, Actuarial Consultant to the NAIC] 
    • <WishList = New York Times Article - " 10 actuaries in a room">

1994-1, NAIC Proceedings