1990-1B, NAIC Proceedings 

1990-1B, NAIC Proceedings

• 1990–1B, NAIC Proceedings – Presentation By James P. Corcoran, Superintendent of Insurance, State of New York – Before the Insurance Committee of the Organization for Economic Cooperation and Development (OECD) – Paris, France – October 27, 1989 – (p868)
  • Until recently, Life insurance was regarded as a stable industry where little change took place, either in the policies offered to the public or in the regulatory environment in which insurers operated.
    • Investments, subject to strict qualitative and quantitative standards, were generally made for the long term in traditional vehicles such as bonds, stocks and mortgages.
  • Over the past decade, however, many revolutionary changes have taken place. Life insurers are now competing with banks and brokerage firms for a piece of the financial services pie.
    • Each player contends that it wants a “level playing field,” but in fact seeks to gain some competitive advantage over the other.
    • Life insurers have been placing greater emphasis on financial services and educating their agents to be financial planners as well as life insurance experts.
  • Competition in financial services has resulted in the introduction of new products which offer a variety of investment incentives coupled with an insurance component.
    • Sophisticated consumers are bypassing the traditional life products for these new “interest-sensitive” products, many of which are backed by vehicles other than the traditional bonds, stocks and mortgages.
    • High risk-high yield obligations, leased securities and futures contracts are now common components of the portfolios of our life companies.
  • All of these changes have, of course, added increased strains on the life insurance community