1980s - ACLI to NAIC

  • To: Member Company Chief Executive Officers
  • From: Blake T. Newton, Jr., President, American Council of Life Insurance - Date: April 22, 1980
    • The purpose of the meeting was to discuss concerns about the liquidity conditions and the possibilities of future adverse developments.
    • The company people wanted to be sure that Mr. Volcker  [Chairman of the Federal Reserve] was fully aware of the potentials of the situation and to arrange a liaison between his staff and the staff of the Council. and this aim was accomplished.
    • In the meantime, we have begun to explore the means by which the resources of the business might be applied to alleviate any temporary extreme liquidity problems that might arise for a particular member company.

1980-2, NAIC Proceedings

[Paul Volcker: 1979–1987, Chairman of the Federal Reserve]

  • 1982-1, NAIC Proceedings - ACLI Paper on Cost Disclosure for Universal Life Products - 4p
  • STATEMENT ON BEHALF OF THE AMERICAN COUNCIL OF LIFE INSURANCE TO THE NAIC (A) COMMITTEE'S TASK FORCE ON LIFE INSURANCE COST DISCLOSURE, December 15, 1981
    • Since universal life insurance was then being marketed only on a very limited basis, the council task force's proposals did not address this product.
      • The council has now developed a  recommendation for universal life insurance, which we would like to present for your consideration.
    • The essence of the proposal is that universal life insurance be treated for cost disclosure purposes as a life insurance plan with a nonguaranteed cost element.
      • Thus, the policy summary would show for the prescribed policy years the anticipated premiums and, both on the guaranteed and currently illustrated bases, the death benefits, cash surrender values, and endowment amounts, if any.
      • The life insurance cost indexes would be calculated on the currently illustrated basis, using the anticipated premiums, and would be required to be shown along with corresponding nonguaranteed elements.
      • An additional item of information that is recommended to be required in the policy summary is the point at which the policy will expire based on the policy guarantees and the anticipated premiums shown in the summary.  (p399)

1982-1, NAIC Proceedings - ACLI Paper on Cost Disclosure for Universal Life Products - 4p

  • STATEMENT ON BEHALF OF THE AMERICAN COUNCIL OF LIFE INSURANCE TO THE NAIC (A) COMMITTEE'S TASK FORCE ON LIFE INSURANCE COST DISCLOSURE, December 15, 1981
    • ... the policy summary should include a statement on the point at which the policy will expire based on the policy guarantees and the anticipated premiums shown in summary.
    • ...Universal Life should be treated as a life insurance plan with a nonguaranteed cost element for cost disclosure purposes.

1982-1, NAIC Proceedings - ACLI Paper on Cost Disclosure for Universal Life Products - 4p

  • It should be noted that a policy would not necessarily be classified as a "scheduled premium" policy simply because the specifications page might set forth a "planned premium" (a concept characteristic of current universal life insurance policies).
  • This is because the planned premium, in most cases, is set by the insured, not the insurer.

-- ACLI

1983-1, NAIC Proceedings 

  • ACLI - ATTACHMENT TWO - STATEMENT ON BEHALF OF THE AMERICAN COUNCIL OF LIFE INSURANCE TO THE NAIC MARKET CONDUCT SURVEILLANCE (EX3) TASK FORCE, June 13, 1988
  • My name is Anthony T. Spano
  • Our proposal involves a method known as the "range" approach"  provide illustrations based on different assumptions. 
  • ⇒ This would serve to demonstrate to the consumer the effect on future benefits of changes in assumptions.
  • Also, illustrations based on other than the company's current scale can provide particularly useful and timely information if a change in experience is anticipated.
  • We would point out some additional advantages of the availability of the range approach as opposed to a limitation of illustrations to current scale:
  • It is often difficult to define exactly what "current scale" is, since a company may, for example, have a different scale for current issued business as opposed to existing business.
  • A current scale limitation would favor companies using a new-money interest crediting approach versus a portfolio approach when interest rates are rising; the opposite would be true when interest rates are declining.
  • A current scale limitation would disadvantage companies that may be acting prudently by lowering current rates when interest rates decline.
  • Current scale illustrations may not be realistic in certain situations, such as at the peak or trough of an interest rate cycle.
  • Availability of the range approach might ease pressures on companies to produce aggressive current scale illustrations.
  • In concluding, we thank you again for agreeing to keep the dialogue open on this important issue.  We respectfully ask your favorable consideration of our proposal and stand ready to work with your task force in any way that might be helpful.

--  1988 0613 - Letter - ACLI to NAIC - A Statement on Behalf of the American Council of Life Insurance to the NAIC Market Conduct Surveillance (EX3) Task Force, Subgroup on Life Advertising Issues - 3p  

1988-2, NAIC Proceedings - PROPOSED AMENDMENT TO NAIC MODEL ADVERTISING RULES