1995-4, NAIC Proceedings

  • NAIC MARKET CONDUCT REGULATION GUIDELINES – Final Draft: Dec. 5, 1995 – ATTACHMENT FOUR-A (p285)
    • It is apparent that consumers place strong emphasis on market conduct regulation. Dissatisfaction with perceived market practices has been the driving force behind the initiatives in a number of states. It was a reaction to the constriction of the insurance marketplace in 1985-1986 that caused many to criticize the effectiveness of state regulation and call for federal involvement. Consumer demands continue to place emphasis on this form of regulation.
    • Adequate and appropriate emphasis on market conduct regulation by state regulators, one which complements financial solvency regulation, should be a primary objective of state regulators. There is not only a need for strong financial regulation, but the need for strong market conduct regulation as well.
  • The NAIC recently developed a Life Insurance Sales Illustration Model Regulation.
  • Although the model does not address many of the problems in the market, the NAIC has stated that the new requirements will make it easier for consumers to understand their policies and prevent some of the market abuses.
  • The industry has been the subject of several cases and administrative proceedings related to deceptive practices, including the practice of illustrating values that could not be supported with experience and informing consumers that their policies would be paid up when that was wholly dependent on the experience underlying the investments and the assumptions made in the contract. Allowing contracts to be restructured creates even more confusion and uncertainty for insurance consumers.
  • Attachment SIX-A (p741)
To: Caroline Scott, Chair, Guaranty Fund Issues B Working Group
From: Mary Griffin, Insurance Counsel, Consumers Union
Date: Nov. 30, 1995

1995-4, NAIC Proceedings

  • Exhibit 6D.2 – Universal Life – Nonforfeiture Value Calculations – {No Increase COIs and Credited Interest in (5) and (6)} – Issue Age 55

1995-4, NAIC Proceedings

  • Annual Statement Re-engineering Project
  • 1996 Consumer Priorities for NAIC
  • Market Conduct and Consumer Affairs (EX3) Subcommittee
  • 5. Consider the Life Insurance (A) Committee Nov. 27. 1995r Minutes Concerning Adoption of the Revised Life Insurance Illustrations Model Act
    • Commissioner Robert Wilcox (Utah) explained that the Life Insurance (A) Committee considered several minor changes in the proposed Life Insurance Illustrations Model Regulation.
    • He noted that only a few of these changes were substantive.
    • He noted one change to treat other cash value policies in a manner similar to the treatment of universal life insurance policies.
    • He also described another Executive Committee change based on the difficulty of disclosing expense allocation.
    • Lastly, Commissioner Wilcox explained that the model requires disclosure of the assumption that currently illustrated non-guaranteed elements will continue unchanged, but this is not likely to occur, so that actual results may be more or less favorable than those shown.

1995-4, NAIC Proceedings

  • Proposed New Standard Nonforfeiture Law For Life Insurance
  • (Preliminary Work By COLI and Other Professional/Regulatory Bodies)
  • From Randy Mire (Tillinghast)
  • Nov. 30, 1995

1995-4, NAIC Proceedings