4 - Snippets - Short List

Richard Wicka, Chair

 She (Stegall) said the ad hoc group also discussed tasks to help it achieve its goal, including: 1) gathering background on how the summaries are used and by whom; and 2) reviewing
narrative and policy summary examples for key factors highlighted in the Working Group’s charge, such as readability, understandability, design and format.

 Ms. Stegall said the ad hoc group learned that, in most cases, the summaries are not
intended as direct-to-consumer pieces and are not meant to help a consumer shop around for coverage; they are delivered at the point of sale.

 She also said that, except from some whole life insurance and term life insurance products, the summaries are explained to the consumer by an agent or broker and really serve as a tool for financial advisors in highlighting the features of a product.

Questions / Observations / Stuff
- Who were the members of the Ad Hoc Group? Specific names
- What Information was gathered?
  How was the Information gathered? 



Richard Wicka, Chair
  Mr. Reyna said the policy overview should help consumers understand how cash value accumulates and can work to their advantage over time.

Mr. Wicka acknowledged that the issue is complicated because a lot depends on how the policy is funded; however, just the knowledge that the policy has cash value could be helpful information for a consumer comparing a
term policy to a whole life policy.

Academy Letter
Gabe Schiminovich

Re: Comments on the “10 Things You Should Know Before Purchasing Life Insurance”
Exposure Draft
Dear Ms.

9. Read Your Policy Carefully
Do premiums or benefits vary from year to year? How much do the benefits build up
in the policy? What part of the premiums or benefits is not guaranteed? What is the
effect of interest on money paid and received at different times on the policy? How
will the timing of money paid and received affect interest earned in the policy? These
are all questions that you should be able to answer by reading your policy thoroughly.
Your agent can help you understand things that are unclear.


NAIC Proc.

3. Discussed Comments from the Academy on NGEs

Gabe Schiminovich (American Academy of Actuaries—Academy) said... work group believes consumers would benefit from the inclusion of a discussion of NGEs <Non-Guaranteed Elements> in a short buyer’s guide, and including the following points would be helpful:

  Brenda Cude (University of Georgia) said the issue of NGEs is interesting, but not something the average consumer would
understand. She did not think it was information that was appropriate for a short guide for first-time purchasers. Karrol Kitt
(University of Texas—Austin) agreed with Ms. Cude. Ms. Mealer also agreed that this was an important topic probably best
addressed in the online tool.


ACLI Letter
Emily Micale
Second, ACLI members question the associated costs and practical responsibilities related to
development of such an online tool. One such practical consideration is who will be responsible to host,
ensure accuracy and maintenance of the online tool. Would the NAIC assume this responsibility and
Cude/Kitt Comments
Revised 2-9-18 for discussion on conference call 2-22-18
Binder 4 p194
Do premiums or [benefits] vary from year to year?

Cude Note:  Comment [BJC3]: To what does this <refer?>

Cude/Kitt Comments
Revised 2-9-18 for discussion on conference call 2-22-18
Binder 4 p194
How much do the benefits build up in the policy?

Cude Note: Comment [BJC4]: What benefits?

Cude/Kitt Comments
Revised 2-9-18 for discussion on conference call 2-22-18
Binder 4 p194
How will the timing of money paid and received affect interest?

Cude Note:  Comment [BJC5]: What interest? Not
mentioned anywhere else.



2017/11/15 Letter, LIBGWG, ACLI Redlined Draft

Unlike a term policy, which can end after a specified number of years, permanent life insurance will continue to the policy’s maturity age so long as premiums are paid.

(Note that this isn’t exactly accurate for UL, where policies can continue as long as the cash value is sufficient to pay the policy charges. We may want to make that distinction.)  <<< ----ACLI Wording <BonkNote>>>>

2017/11/15 Letter, LIBGWG, American Academy of Actuaries, Letter
Universal life also allows for flexibility in policy benefits, not just premium payments.




b. Laura Hanson <Academy> suggested leaving out details if the information is something the consumer will undoubtedly find out and focus on information that could be missed.

Ms. Kitt and Ms. Cude said they are concerned with eliminating information on the basis that the consumer will find out eventually.



Law Review - No-Reading Problem

Mr. Moorhead: 

  • Second, belonging in the area of the actuary, there are questions about the reliability of dividend illustrations.
  • By reliability I am not referring to whether those dividend illustrations will be met in practice.

Senator Stone:

  • Or whether they are on projections with the facts that are on hand at the time you make projections.

Mr. Moorhead:

  • Yes, whether all actuaries are following the same process in converting the same dividends into n dividend illustration of the policy.

Senator Stone:

  • Well that is not the subject.
  • You are not suggesting that the actuarial standardization be made a subject of regulation are you?
  • You are urging that a society of actuaries, the group itself, professionally do that.

Mr. Moorhead: 

  • Yes, I am. I am, I may say, in favor of minimum regulation and maximum encouragement by the regulators and the possible regulators for action on a voluntary basis.
  • In this matter I am discussing, the Society of Actuaries has gone a certain distance with a report that is in your hands.
  • I just think they haven't gone far enough, and that is a separate matter.
  • The third of the matters that belong in the actuarial field is the question-I'm not sure that I have heard it come up in this last any or so-whether the public can safely reply on that word "participating" as meaning what the buyer's guide says that it means, and what the insurance policy says that it means.

1975 - GOV - Veterans Insurance Information Disclosure - Stone