April 2020 – Page 4

Political Science 1991 – AP – The Politics of Insurance Regulation, Kenneth J. Meier Condorcet’s jury theorem ————————————– The Cost-Benefit Revolution By Cass R. Sunstein Why policies should be based on careful consideration of their costs and benefits rather than on intuition, popular opinion, interest groups, and anecdotes. ——————————————–

Investment Risk In the ACLI’s view, there is no investment risk to the consumer since the product typically carries a guarantee which includes principal plus four percent…” — Mr. <Gary> Hughes <ACLI> briefly discussed “universal life” type products. 1982-1 NAIC Proceedings One corporate reason is that several big life insurance companies got a nasty shock…

Cash Value Gary Sanders (National Association of Insurance and Financial Advisors—NAIFA) agreed that use of the term “cash value” was confusing. 2017 0217 – NAIC – LIBG WG Conference Call (p317) – Statement of the National Association of Life Underwriters [NALU, Current Name is NAIFA] The Historical Treatment of Cash Values was Soundly Conceived Cash…

Market Conduct Market Conduct – Documents NAIC – Market Conduct The NAIC Examination (A6) Subcommittee, in 1974, recommended the establishment of a “separate and distinct” program of surveillance to ensure fair treatment of policyholders. Thus was “market conduct” born. The term “market conduct” has, however, fallen upon bad times. 1991-2A, NAIC Proceedings (p13) – Terri Vaughan (NAIC-CEO…

Expectations Focus Groups Life insurance, because it is a nontangible product, is extremely susceptible to being perceived as whatever people think it to be. — Larry Silkes 1983 – SOA – Universal Life Valuation and NonForfeiture: A Generalized Model, Shane A. Chalke and Michael Davlin, Society of Actuaries – 72p The most obvious is if we fail…

Premium Per Thousand For cost comparison purposes, the natural unit price for insurance is dollars of Premium per thousand dollars of death benefit per year—adjusted as appropriate and cash surrender values. — [ACLI] American Council of Life Insurance, on the FTC Staff’s Responses to Criticisms of the Report of the Report on Life Insurance Cost Disclosure …

Critics MICHAEL B. HUTCHISON: I believe that there is an urgent need for the life insurance industry to answer the accusations of its critics who say that its failure to disclose accurately the price of its products to its policyholders has led to a noncompetitive situation detrimental to the interests of policyholders and the public.…

Cost Comparison Until the buyer understands how the product works, attempts to compare price are essentially meaningless. 1972 – SOA – Life Insurance and the Buyer by Anna Rappaport, Society of Actuaries – 2p-Article (p117-120) – Exhibit Il which shows that, in the last fifty years, no less than 21 different attempts have been made…

Market Failure Part 1 – 1979 02 – SOA – Permutations and Computation, EJM, Society of Actuaries – 3p The inability to evaluate policy performance in the normal course of owning the policy seems to be fundamental to any theory of informational market failure in this market. (p293) 1985 11 – FTC – Life Insurance…

Free Look / Cooling Off Period NAIC – CIPR-Knowledgebase – Model Regulation 582: Life Insurance Illustrations – [link] Question: …. if the regulation includes a 10 day free look provision, would staff also provide me with minutes and other official notes on the purpose of the free look period? Answer: … the “10 day free look provision”……