Life Disclosure Working Group - (A) - NAIC

The working group's concern was how to bring about a change without damage to the market place. (p656)

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

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  • 1993 0525 – GOV (Senate) – When Will Policyholders Be Given The Truth About Life Insurance?
  • Life Insurance Illustrations Model Regulation, MDL-582 - 38p
  • 1998 06 - AAA - Report - to NAIC (Life Disclosure Working Group) - Survey of First-Year Company Experience Under Life Illustration Regulations Based on the New NAIC Model, Report of the Disclosure Working Group Committee on State Life Insurance Issues, American Academy of Actuaries - 33p
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  • June 10, 2000
    • 1994-3, NAIC Proceedings
    • Ms. Lanam said that the regulators should not ignore the fact that consumers take advantage of a situation.
      • If they were now dissatisfied with the policy performance, they would look for someone to make them whole.
    • Mr. Wright said that he thought the issue of accountability was very important. He favored the approach of requiring all parties to the sale to agree that everything was explained.
      • Mr. Wright said that companies say agents manipulate the figures and they cannot do anything about it. Agents say that they do not get information from the company to help them understand the assumptions.
  • Jack Turnquist, ASB, Actuarial Standards Board said his organization had held a public hearing in March because of concern about abuses in illustrations and concerns about how non-guaranteed elements were being illustrated.
    • The Actuarial Standards Board had considered development of standards, but he felt that it would be done in a vacuum without an understanding of what the NAIC would propose.
      • He said there needed to be coordination of the NAIC in development of the model regulation and the Actuarial Standards Board in development of the standards.
    • Mr. Wright asked if the Actuarial Standards Board would he willing to start drafting its standards as soon as the model regulation was developed, and Mr. Turnquist responded in the affirmative.
      • Mr. Wright asked how long this process would take.
    • Mr. Turnquist said he thought the Board could be finished within 12 months from the time it started drafting, allowing for a period of exposure a.lid comment.
      • He said the usual timeframe was 24 months but he would ask that this project be put on a fast track..

1993-4, NAIC Proceedings, Life Disclosure Working Group (1993 1204)

  • LIFE INSURANCE (A) COMMITTEE June 15. 1994 - Baltimore. Maryland
    • 1. Received the report of the Life Disclosure Working Group, which circulated drafts of the Life Insurance Illustrations Model Act and the Rules Governing the Use of Illustrations that permit illustrations of guarantees only into the future as well as illustrations of past performance.
    • 2. Added the charge of considering options that would authorize non-guaranteed elements to be projected into the future to the Life Disclosure Working Group.

1994-2, NAIC Proceedings

  • We have to get out of our mode of talking about these policies in language that can only be understood by the person who wrote the language.
    • I find, after 30 years plus of experience in the life insurance business, that there is jargon used in illustrations that I don't understand.
    • I can have difficulty in taking an illustration and figuring out what in the world the authors are trying to illustrate and how they are doing it.

--  Robert E. Wilcox, Utah Insurance Commissioner and Chairman of the Life Disclosure Working Group (NAIC)

1994 - SOA - Problems and Solutions for Product Illustrations, Society of Actuaries - 28p

  • The whole process started in the NAIC, as it had to If radical changes in the way we illustrate policies were going to be made, they had to start at the NAIC.
    • Furthermore, the NAIC was being pushed by Senator Howard Metzenbaum who wanted to accuse the regulatory structure of not doing its job and then to bring regulation up to the federal level.

--  Frank S. Irish, ASB, Actuarial Standards Board

 1996 - SOA - Professional Standards Affecting Life Actuaries, Society of Actuaries - 18p

  • 2000-1, NAIC Proceedings - March 14, 2000
    • (p81) - Thomas Foley said the working group had been charged to make amendments to the Life Insurance Disclosure Model Regulation - (Attachment Three-A) to be consistent with the Life Insurance Illustrations Model Regulation adopted in 1995.
    • (p83) - Thomas Foley said that for a variable product, if the 12% illustration is used, it can show a very low premium for coverage.
      • If the policy does not attain the 12% return it will not be a permanent policy.
      • He opined that consumers are misled if the 12% is not a reasonable amount over time and consumers are in the same position as they were in the 1980s when "vanishing premiums" were touted.