Life Insurance Cost Comparison (C3) Task Force

The purpose of revising the preliminary draft is to produce a buyers guide which contains the same general concepts as those contained in the preliminary draft but in a literary style which can be easily read and understood by the average buyer.

7. A study of the feasibility of developing a central data bank of cost comparison information.
8. A study of the need for developing alternate systems of improving the general public's understanding of the life insurance product through means other than point-of-sale disclosure.

It has been aptly stated that it is more important for the policyholder to know what he gets than how it works.

• In that respect, the life insurance buyer can be compared with the purchaser of a television set; he is more interested in what shows up on the tube than what takes place behind it. 

I have stressed these fundamentals because they have greatly influenced our thinking on this pivotal question of balance.

• How much information is enough?
• How much is too little?
• How much is too much?

In this respect, I believe that this subcommittee faces the identical question that we have been dealing with.

We do not believe that it should be necessary for Congress to enact laws for the Veterans Administration to issue regulations requiring insurers to supply comparative cost information to veterans converting their insurance.

• The insurers ought to provide this information as a matter of course. 

The principal strength of the NAIC model regulation is the diversity of opinion that was considered in its design and the resulting "balance" that characterizes the end-product.

Commissioner Huff has described the difficult process of attaining a good balance between the near-infinite information which could be supplied to the consumer and the very limited amount of information that can be digested by the average consumer, in a meaningful way, to produce a sound buying decision.

The NAIC model regulation is not solely the product of life insurance technicians; lawyers, politicians, economists, psychologists, and persons experienced in life insurance sales and company operations have had a hand in its design.

The result is a regulation which should have a maximum beneficial impact on the consumer's buying decision -- rather than a regulation which simply inundates the consumer with indigestible data.

1976-4, NAIC Proc.