Bonk - 2022 06

  • 2015 0329 - NAIC - LIAC, Life Insurance and Annuities (A) Committee
    • Appointed a New Working Group to Revise the Life Insurance Buyer’s Guide.
    • Ms. Matthews said the Committee has a 2015 charge to review and consider revisions to the Life Insurance Buyer’s Guide (Buyer’s Guide) in conjunction with the Life Insurance Disclosure Model Regulation (#580). She noted that the Buyer’s Guide is woefully outdated.

SOA - Society of Actuaries

  • 1975 (originally) - SOA - The Universal Life Insurance Policy, James C.H. Anderson, Society of Actuaries - 10p
  • 1975 - SOA - Ordinary--New Products, Society of Actuaries - 18p
    • 1976 - SOA - Toward Adjustable Individual Life Products, Society of Actuaries, Walter L. Chapin - 50p
  • 1981 - SOA - Universal Life (RSA81V7N412), Moderator: Samuel H. Turner, Society of Actuaries - 16p
    • 1983 - SOA - Universal Life Valuation and NonForfeiture: A Generalized Model,  Shane A. Chalke and Michael Davlin, Society of Actuaries - 72p
  • 1993 - SOA - Sales Illustrations: We Can't Life With Them, But We Can't Live Without Them!, Society of Actuaries - 28p
    • 1991-1992 - SOA - Final Report* of the Task Force for Research on Life Insurance Sales Illustrations, Society of Actuaries - 142p
      • Appendix II - Illustration Examples

NAIC

  • 1982-1, NAIC Proceedings - 1981 0831 - ACLI - Statement of the American Council of Life Insurance Before the NASAA NAIC Joint Regulatory Insurance - 10p
  • 1990-1A, NAIC Proceedings - NAIC / LIMRA - Universal Life Disclosure Form Focus Group Summary  ---   [BonkNote]  ---  10p
  • 1993-1B, NAIC Proceedings - Letter - 1992 0918 - Senator Howard Metzenbaum (D-OH) to NAIC - 2p
  • 1993-3, NAIC Proceedings - Letter - 1992 0724 - NCOIL to State Governors - Re: Full Disclosure/No Misleading Advertising in the Sale of Life Insurance

Media

  • It caused many problems for the industry; it caused many problems because the press got involved, and the press doesn't understand the products as well as it thinks it does.   -- Linda M. Lankowski

1995 - SOA - Practical Illustrations and Nonforfeiture Values, Society of Actuaries - 14p

  • But perhaps we might, as a profession, want to consider requiring an appropriate actuary in any company to prepare a report subject to our normal actuarial standards process to be available on request.
  • That might itself, through the potential investigations by various types of organizations ranging from regulators to Consumer Reports or whomever you have, go a long way toward enforcing the type of self discipline that we are really looking for here.

--  Bruce Nickerson

1991 - SOA - Illustrations, Society of Actuaries - 20p

  • 1994 0613 - apnews - Life Insurance Buyers Allege Misleading Sales Tactics Were Used With PM-Vanishing Premiums-Illustrations, by Mark Dennis - [link]
  • 2016 0813 - NYT - Why Some Life Insurance Premiums Are Skyrocketing, by Julie Creswell and Mary Williams Walsh - [link]
  • 2018 0919 - WSJ - Universal Life Insurance, a 1980s Sensation, Has Backfired, by Leslie Scism - [link]
    • ... in 2000 that the universal-life policy she bought in 1983 was financially off track.

1970s, 1980s, 1990s can help to understand what happened in the 2000s, 2010s, 2020s and can inform the future.

What happened in the 2000s, 2010s, 2020s?

  • 2008 Financial Crisis
    • AIG - American International Group
    • Hearings
      • FCIC
      • COP
      • Senate
      • House
      • Lawsuits
  • FSOC - Financial Stability Oversight Council
    • SIFI Designations
      • MetLife

What happened in the 1970s, 1980s, 1990s?

  • New Products
    • Adjustable Life
    • Deposit Term / Whole Life
    • Indeterminate Premium Life
    • Variable Life
    • Universal Life
    • Variable Universal Life
  • 1970s
    • Government Hearings
      • Hart
      • FTC
      • Moss
    • NAIC
      • Life Insurance Solicitation Model Regulation (Name later changed to Life Insurance Disclosure Model Regulation)
        • Life Insurance Buyer's Guide
      • Manipulation
  • 1980s
    • ProductsUniversal Life
    • Universal Life Insurance Model Regulation
        • 1990s
          • Life Disclosure 
            • Life Insurance Illustrations Model Regulation

The work of science is to substitute facts for appearances and demonstrations for impressions.  – Ruskin

  • long-standing motto of the Society of Actuaries
  • The quote is from Mr. John Ruskin’s book, The Stone of Venice, Volume 3, page 36.

2012 - SOA - Substitute One Mis-impression, Society of Actuaries -  4p

  • The cost of insurance in the table varies from $0.06 to $83.34 per year per thousand dollars of insurance provided. 
  • It suggests a cost of $0.15 initially (it goes up) for a healthy 30 year old. 
  • Now I'm not the sharpest tool in the shed, but that seems like an awfully big range.

2012 0409 - The White Coat Investor - What Happens When Ogres and Trolls Mate - AKA Variable Life Insurance - [link]

  • I tell clients that the cash value is guaranteed not to go down when the market goes down because the cash value has a 0% annual floor.

--  Declaration of Sean L. Covi - (Agent), 10.09198-JVS(RNBx)

Joyce Walker et al v. LIfe Insurance Company of the Southwest

  • Q: Could you describe for the jury what you were trying to convey when you drew this drawing, Exhibit 774, on the back of her illustration.

A: JEFFREY STEMLER - (Agent): This is -- when we are sitting down talking about insurance, we try to explain to the prospects exactly how the insurance works.

  • So this is part of our talk that we give to explain how it works.
  • So this would be a build slide.
  • This didn't just start there.
  • I drew a line on the bottom and I said: When you buy insurance, there is a minimum amount that you must pay for insurance to pay for the costs and put the policy in force.
  • And I drew the line and I wrote minimum, and I would ask who do you think sets that price.
  • Some people will say: I don't know.
    • Others: Well, the insurance company.
    • I go, yes, you're correct.
  • And I said: They have actuaries, and the actuaries, their job is to figure out how much they need to collect for any given amount based on the age of the person so that they can cover the risk and also still make a profit.
  • I said: But there's another line that we need to b  concerned about, and then I draw the line up on top and I put the max there.
    • And I say this is the maximum you can pay for a contract.
    • I said: Do you know who sets that limit?
    • People will often say: Well, the insurance company; right?
    • And I say: No. It's actually the government.
  • In the example we'll often say: Well, let's just assume that this is $500,000 that we are dealing with here and the minimum premium is a thousand dollars and the maximum premium is $5,000.
    • Why would anyone put $5,000 into a contract if you could buy the same amount of coverage for only 1,000?  (p40-41)

2015 - Walker vs Life Insurance Company of the Southwest -  Trial Day 11 - Case 2:10-cv-09198-JVS-JDE Document 820 Filed 12/01/15 Page 40 of 279 Page ID # 33532

  • Pulling Info Out
    • NAIC -  Life and health insurance guaranty association model act: chronological summary of action - [link]