He <Birny Birnbaum (Center for Economic Justice—CEJ)> said it is important that state insurance regulators determine if illustrations are accomplishing what they are intended to accomplish, how they are being used and whether consumers understand them. Mr. Birnbaum also suggested that illustrations should be consumer-tested.

2019/11/15
LIIIWG 
ACLI Letter

-Idea of the Informed Consumer

3 Broad Recommendations:
1) Consumer Testing -Fundamental Question: Will this form enhance the customer experience?  
2)  Enhance the NAIC Electronic Consumer's Guide -  NAIC Life Insurance Information - Example: SEC Summary Prospectus
3) Have a larger discussion about the disclosure and buying process... backed with data driven studies to understand when consumers need what information in the buying process.  Consider the information available at each point in time.

Disclamer :  If we are going to have a meaningful conversation everybody has to walk in with putting aside their presuppositions.  In other words, if the conclusion of the analysis is that a change needs to be made, then we need to embrace the change.  If the conclusion of the analysis is that a change doesn't need to be made, then we need to embrace that no change needs to be made...or whatever that embracing is...

If the 3 broad recommendations get baked into the work plan, we think that will help the process.

 The issue of Consumer Testing has come up before the group and I think it's a good point and something that we need to keep in mind. 

That's not something that our Working Group can do on it's own, but if that is the will of the Working Group we can certainly make a recommendation to the A Committee that Consumer Testing be explored.  One of the things we've been struggling with is the Chicken and Egg problem.  My hope is if we have some samples that there is some general consensus around then we have something to test.  And, I guess, there's some disagreement around whether or not that's needed at all.  

As far as comments 2 and 3, I'm not sure that those are things that our Working Group can address, but I appreciate how this workstream goes into those larger issues.

2020/7/24
LIIIWG
Birny Birnbaum

In response to the ACLI Comments:
Those 3 broad issues are really appropriately addressed at the A Committee, not to this Committee <Working Group>.  This Committee <Working Group> has a specific charge to do.  And particularly items 2 and 3 are outside of those charges.  In fact, there is another NAIC Life A Committee <LIFE INSURANCE ONLINE GUIDE (A) WORKING GROUP>..... Second point that Mr. Reeder raised.    

In response to point 3, CEJ has already proposed a broader look at Illustrations.  And that should be a topic at the Summer National Meeting at the A Committee.  In terms of Consumer Testing, we always asked for Consumer Testing, but it requires funding and the Working Group is not a position to either ask for or direct the expenditure of such funding.  It has to come through the NAIC or through private parties.  So, again, these are not issues that are not appropriately before this Working Group.  

2020/7/24
LIIIWG
Jodi Lerner 

2020/7/24
LIIIWG
Richard Wicka