Change Without Damage?

The working group's concern was how to bring about a change without damage to the market place.

1993-4, NAIC Proceedings - Life Disclosure Working Group – NAIC

  • So if somebody could think of a way to get to the consumer without causing real problems among recent buyers, who are our most fragile customers, we would like to hear it.

-- John W. Keller,  Northwestern Mutual


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

  • John Bruins, ACLI... said the ACLI is concerned about the reaction that may be received from consumers when their policy illustration changes, even though no changes have been made to the product being illustrated.
  • He noted that several companies have indicated receiving negative reactions from policyowners when their policy illustration changed. 

2016-4, NAIC Proceedings - LATF, Life Actuarial (A) Task Force

  • We can see why it would be confusing and difficult to explain… without eroding some confidence on the consumer's part.

-- Rachel (Texas)

2019 1115 - IULWG Conference Call - [Bonk]

  • 2010-1, NAIC Proceedings - Principles-Based Reserving (EX) Working Group
    • Paul Graham - ACLI - stated that the NAIC should condition a survey to determine the impact on the industry.
      • He said he would be willing to assist the NAIC in developing and distributing such a survey, and suggested the NAIC hire an independent consultant to accumulate the results.
  • I think any way that we can make illustrations more understandable to the public is certainly going to help us.

--  Linda M. Lankowski

1995 - SOA - Practical Illustrations and Nonforfeiture Values  Society of Actuaries - 14p

  • Mr. Wright responded that he recognized this problem and saw also the problem of illustrating extremely complex products.
  • It was his personal view that it would require some significant changes in how products are illustrated.
  • The working group's concern was how to bring about a change without damage to the market place.

1993-4, NAIC Proceedings

What I noticed was there is a requirement for in-force illustrations, and people may have thought they bought one thing and whenever you have to give them an in-force illustration with a current disciplined scale, they're going to realize they bought something else.

I think many companies will have serious problems with policyholder retention.

  --   Mark J. Greene, FSA. MAAA, Supervising Actuary, New York State Insurance Department

1995 - SOA - Practical Illustrations and Nonforfeiture Values, Society of Actuaries - 14p

  • I am on this panel principally as Chairman of the ACLI Subcommittee on Cost Comparisons.
    • Much of our work has dealt with the issue of illustrating Nonguaranteed Elements.
    • As a backdrop, I want to quote from a January 1988 Financial Planning article.
    • The article is entitled "Future Shock" by Harry Lew with the sub-heading:
      • "What will happen when a generation of insurance buyers begins comparing unrealistic illustrations with the actual performance of their policies?
    • Industry leaders would prefer not to find out.

--  Larry R. Robinson

1988 - SOA - Actuarial Opinion on Non-Guaranteed Elements, Society of Actuaries - 12p

In my presentation, I will be talking about the views of the regulators in the U.S. on the illustration problem. 

So we contacted the regulators, collected their input and will present it here.

Our Task Force is very interested in working with the regulators on this subject.

  • The alternative is a worsening of the present situation.
    • We would hate to see the solution, if you want to call it that, be a dramatic and cathartic type of event like the savings and loan bailout or an  Armstrong investigation

--  Benjamin J. Bock, Transamerica Occidental

1992 - SOA - Life Insurance Sales Illustrations, Society of Actuaries - 16p

  • I sincerely believe we have a flawed instrument in today's sales illustrations.
  • ...we did not communicate the impact of change as well as ...we should have.
  • Our biggest mistake would be to delay.
  • I don't believe the consumer will tolerate or forgive us, let alone the regulators, if we do nothing.

--  Robert Nelson, chairperson of the National Association of Life Underwriters (NALU) Task Force on Illustrations - <Currently NAIFA>

1993 - SOA - Sales Illustrations - We Can't Life With Them, But We Can't Live Without Them!, Society of Actuaries - 28p