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.
    • <WishList: "Future Shock" by Harry Lew - January 1988 Financial Planning article.>

--  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.
    • Some of the comments that we have heard from regulators about the illustration situation suggest feelings of, if not outright despair, growing frustration.
    • A couple of them spoke sadly of the futility of regulating an illustration when the real issues involve the agent or the company.
    • Larry Gorski of the Illinois department mentioned that in states that do not regulate advertising or promotional materials, misleading statements can be rampant in those materials even if the illustrations are made pure.

 --  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 - [Bonk: Currently NAIFA]

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

  • Touching the vexed question of "lapses," much comment has been made, and no doubt some abuse of the business is indicated by the immense volume of policies returned as lapsed; but it is a difficult point to deal with.
  • There is a large percentage of waste in all human effort, and even in oil natural movement Lapses unhappily prevail even in religious affairs, and some of the seed grain is wasted by the most careful sower.
  • You must be careful how you pull up the tares in the life insurance field, lest you destroy the whole crop. - [Bonk: Change Without Damage]

--  J. B. Ecclesine, editor of The New York Underwriter

1871-2, NAIC Proceedings (fka National Insurance Convention)  ---  [BonkNote]  ---  657p