• At the 1986 Annual Meeting of the American Council of Life Insurance ACLI Chairman John Pearson stated:
    • Our products must do what we say they do.
    • Our companies must fulfill their promises.
    • All the words in the world - the best government relations, the best public relations-will not be enough without performance.  (p2)

1987 01 - SOA - Non-Guaranteed Promises: A New Standard of Practice, William T. Tozer, Actuarial Update, Society of Actuaries -  8p

  • The New York Life promised:
    • ... on a 20 year endowment $1,650 and paid $710;
    • ... on a 20 year deferred dividend $1,143 and paid $527;
    • ... on a tontine it estimated $1,234 and paid $564;
    • ... on another $954 and paid $390.
  • As anyone reading the policy forms will note, these estimates are not part of the contract which provides that the policyholder is entitled to only what dividends or investment profits the officials of the company choose to apportion to him.
    • The promise is made by the agent in separate printed estimates which purport to be the experience of other policyholders and which the prospective policyholder is assured will be equaled in his case.
    • Whether or not the statements are true in regard to the returns some policyholders have received, there is no question that they do not come true in nine cases out of ten.

1906 - Book - How to Buy Life Insurance, by QP

⇒   [Bonk: Anyone know who the Author is? My guess is Miles Menander Dawson

  • The promise has changed:
    • ... from "I will guarantee that the premium you see will provide the benefits you see, and maybe share future good times with you"
    • ... to a promise of "I will share the good experience I expect with you now, but if it doesn't happen you will have to pay me more than you may have expected to."

--  Bruce E. Booker

1988 - SOA - Update on Universal Life Reserves and Non-Forfeiture Values, Society of Actuaries - 36p

  • Policy illustrations continue to be the dominant tool used within the life insurance industry to compare the relative cost of death benefit protection between various companies and products.
    • This is somewhat unfortunate, given that the only promise a life insurance company makes when it sells a product are the contractual guarantees.
  • Policy illustrations are not promises; rather they are hypothetical illustrations of what might happen if certain, often undisclosed assumptions come true.  (p8)

--  Mel G. Todd, President, Clark/ Bardes - fellow of the Society of Actuaries and a member of the American Academy of Actuaries and the National Association of Life Underwriters

1993 0525 - GOV (Senate) - When Will Policyholders Be Given The Truth About Life Insurance?, Howard Metzenbaum (D-OH)  ---  [BonkNote]

  • One problem area in a lot of policies has been interest rates.
    • A slow cumulative, very large decline in interest rates has affected everything.
  • Why are we getting so many complaints?
    • Did the policyholder expect rates to stay the same forever?
    • Did the agent or the company mislead?
    • Did the policyholder think we were promising?
      • He shouldn't have, I hope he didn't.

--  Bruce E. Booker, Life of Virginia, a member of the American Council of Life Insurance (ACLI) Task Force on Cost Disclosure and the National Association of Insurance Commissioners (NAIC) Advisory Group on Illustrations

1993 - SOA - Sales Illustrations - We Can't Life With Them, But We Can't Live Without Them!, Society of Actuaries - 20p

  • On perhaps the bad side, the potential buyer is now being subjected to sales illustrations from companies that look identical to him.
    • Some of these have 7% current scale interest rates, some have 13%, some are front loaded, some are back loaded.
      • He sees all kinds of different promises.
    • How can he assess the credibility of these proposals?
    • What promises are actually being made?
    • How much risk is he taking and how much is he transferring to the insurer?
    • Does he know what things can change and what things can't?
    • How much should we tell him?
    • How much does he want to know, for that matter? (p1558-9)

--  Bruce E. Booker

1988 - SOA - Update on Universal Life Reserves and Non-Forfeiture Values, Society of Actuaries - 36p