• Speaking from my IMSA experience, there's a lot of emphasis on internal replacements, replacement activity, trying to meet those definitions, and track that activity, but beyond that, not much is captured in the applications.
• But at some companies that I've talked to, there's a real concern about funds coming from a lump sum paid out of a 401(k) plan.
• The concern is that these are qualified monies, and that somehow a broker/dealer/sales agent rolls them into a non-qualified variable annuity.
• That would really be ripe for some kind of abuse because you're probably not helping out that customer.
• So you have to go through a litany of questions with the customer, like:
  • "Is this the right time to buy this annuity?
  • Are you fully funding your 401(k)?
  • Are you in your deferred comp plan at work?"
• We need to determine the right choice and order of priority for some of those kinds of issues.
• Regulators make a comparison with the existing insurance program to determine if a company is really looking at the customer's profile.

--  Dana Rudmose, not a member of the sponsoring organizations, is Director of KPMG Peat Marwick in Columbus, OH

1998 - SOA -  Market Conduct: A New Actuarial Frontier, Society of Actuaries - 20p