1970s - NAIC - Insurance Regulators - Snippets

  • (p1501) - John Durkin, New Hampshire Insurance Commissioner: As a starting point, there is little regulation of the life insurance industry by the States.
    • The States do little with respect to life insurance regulations for many reasons, mainly because there are very few problems with complaints over claims.
    • Most of the staffs are involved with complaints relating to automobile insurance and health insurance.
    • Life insurance is sort of the stepchild of many, if not most, insurance departments.

1973 0221 and 0222 - GOV (Senate) - The Life Insurance Industry - Philip Hart (D-MI)  ---  [BonkNote-Part 2 of 4]  ---  [PDF-733p-GooglePlay

  • (p117-120) - Exhibit Il  which shows that, in the last fifty years, no less than 21 different attempts have been made to solve this problem
  • Furthermore, enacting a federal statute on life insurance cost disclosure would only address itself to part of the problem.

--  Statement of Stanley C. DuRose, Jr. -  NAIC / Wisconsin Commissioner of Insurance - (p107-131)

1973-2, NAIC Proceedings

1973 0221 and 0222 - GOV (Senate) - The Life Insurance Industry - Part 2 of 4 - Philip Hart (D-MI)  ---  [BonkNote-Part 2 of 4]  ---  [PDF-733p-GooglePlay]   

  • Speaking before state insurance commissioners at the Washington Hilton Hotel or what each called the “Equity Fundings fiasco,” Fred A. Mauck, Illinois' newly named director of insurance, said that because of the “hard work” of state regulators Equity Funding was “not a tragedy but an absurdity.
    • “Quite frankly,” he said, “it raises a troublesome, but entirely proper, question as to the effectiveness of insurance regulation.” 

1973 0605 - NYT - Insurance Commissioners Plan Surveillance Study - Equity Funding Corporation of America, by Robert J. Cole, Special to The New York Times - [link]

  • W. Keith Sloan, Actuary for the Arkansas Department, presented a statement identifying problems associated with special endowment policies or other policy forms which will frequently contain an endorsement, rider or side-fund, and which frequently are improperly sold to the public.
    • The statement by Mr. Sloan is attached to this report. (p750)
  • In executive session the subcommittee voted to establish a task force to identify the particular types of policy forms involving the problems discussed by Mr. Sloan. (p696)

1975-1, NAIC Proceedings

  • (4) At what stage do projections become misrepresentations?  (Report - p750)
  • The classic case of misuse, which called the problem to our attention, had to do with a disclosure form given a policyholder or applicant and sent to us in what appeared to be horror by an agent of another company.
    • On this form the insured was a girl, age five. Deposits were illustrated as accumulated at 9% for sixty years.
    • The company does not earn 9% and has no investments with sixty-year maturities.

--  W. Keith Sloan, Life Actuary, Arkansas Insurance Department

1975-1, NAIC Proceedings

  • (p44) - NAIC - William H. HUFF III, NAIC President, Iowa Insurance Commissioner -  If the Society of Actuaries' research is accurate, and I assume that it is, the additional disclosures really didn't make much difference in the ranking of how these various ranked in cost I would have a feeling, and I've been in this for about years, and we've been very active in the complaint area, too, you have two problems with a complicated formula.
    1. If you turn them off, they're not going to buy anything. They aren't going to understand it....
    2. ....the other problem, the agent out In the field, and unless he's carrying a book around with him, I'm not sure that he could explain what all of this is either.
  • Richard STONE (D-FL):  In other words, your impression on a practical level is that the likelihood of the veteran or the consumer, in this it would be the veteran, would not necessarily be enhanced by the more complicated approach but very well be and would be enhanced as to relevance and as to relative cost by the NAIC model approach ?
  • Mr. HUFF:  We would hope so. I'm also the "blue sky" administrator in Iowa, and we know pretty much that if we don't get everything that should be disclosed In the first four pages it's not going to be read, and things that we really want disclosed we put on the front page and put it in big type.
  • Senator Stone: In other words, you're saying if it's in the fine print it's the same thing as not ever being disclosed?
  • Mr. Huff:  That's right.
  • Senator Stone: If It's too much fine print nobody reads it.

1975 1203 and 1204 - GOV (Senate) - Veterans Insurance Information Disclosure, Richard Stone (D-FL)  ---  [BonkNote]  

  • (p43) - Dan Andersen, NAIC / Iowa Insurance Commission, Actuary:  ....so we developed a buyer's guide concept where we want to explain how you use the index.
    • Well, if you explain how to use the index, you ought to explain what the policy is and what choices a buyer has,
    • ... and we became convinced that the worst decisions that were made weren't necessary because the buyer bought a high cost policy but that he bought an inappropriate policy for his needs and for his budget.
  • Senator Stone (D-FL).  In other words, what we're looking for is not relative cost so much as relevance.
  • Dan Andersen.  Right, relevance to the buyer's needs and abilities to pay.

--   Dan Andersen, director of the Life and Health Insurance Division and chief actuary of the Iowa Insurance Department and chairman of the Cost Disclosure Task Force of the NAIC

1975 1203 and 1204 - GOV (Senate) - Veterans Insurance Information Disclosure, Richard Stone (D-FL)  ---  [BonkNote]