Actuarial - Questions

  • We designed commission rules that anticipated a relatively large number of rollovers of existing policies;.
  • ..full commissions are paid provided the new Universal Life face amount is at least two times the face amount of the replaced policy.

--   Phillip B. Norton, not a member of the Society, is Vice President of The Lincoln National Life Insurance Company

1983 - SOA - Individual Life Insurance Retention and Replacement Strategies, Society of Actuaries - 24p

  • 1982 - SOA - Programs to Conserve Traditional Life Insurance Policies, Society of Actuaries - 18p
    • George R Dinney ....the Flexible Premium nonpar policy has already been challenged by regulatory authorities on the grounds that the difference between the guaranteed premium and the current experience premium is a policy dividend.
    • Let us agree on our terms.
    • What I mean by traditional life policies is the life insurance product stereotypes.
      • A stereotype policy is one which is indivisible and wholly defined, by its terms, at issue.
      • Under this heading I would include the American version of "Universal Life" - what I call Univoisal Life.
        • [Bonk: Does Dinney Mean...?
          1. Adjustable Life, Walter Chapin, Minnesota Mutual?], or
          2. Using Non-Guaranteed Elements to reduce the premium (P1) paid?
            • Guaranteed vs Current
            • Vanishing Premium, Target Premium]
    • Univoisal Life has a rigid design structure for ease of compliance with regulatory and tax standards.
    • On the other hand, "true Universal", based on my original formulation, is modular and completely flexible.
    • The replacement threat presented by Univoisal Life and, contrarily the value of Univoisal Life in defensive terms, can be measured by comparing the premiums for $100,000 of traditional whole life insurance, age 40, with premiums for the analogous Univoisal Life.
      • Traditional (average) - $16.50 M
      • Traditional (best) -15.50 M
      • Univoisal - 9.50 M
    • The Law of Requisite Variety appeals to conventional actuaries who devise complicated problems for which they develop equally complicated solutions.
    • The thesis is diametrically opposed to the concept of "universality", which aims at simplicity of both problem and solution.