1991-1992 – SOA – Final Report of the Task Force for Research on Life Insurance Sales Illustrations – Society of Actuaries – 142p

1991-1992 - SOA - Final Report* of the Task Force for Research on Life Insurance Sales Illustrations, Society of Actuaries - 142p

1991-1992 - SOA - Final Report* of the Task Force for Research on Life Insurance Sales Illustrations, Society of Actuaries --- [BonkNote] --- 142p
- Appendix II - Illustration Examples
- *Opinions expressed herein are those of the Task Force for Research on Life Insurance Sales illustrations and of the Committee for Research on Social Concerns. This report does not purport to represent the views of the Society of Actuaries or of its Board of Governors.
  - Judy A. Faucett (Chairperson), Benjamin J. Bock, Bruce E. Booker, John W. Keller, John R. Skar, Linden N. Cole

Bob Wright (Virginia) said the Society of Actuaries report referred to the fact that companies said they had no control over what agents did.

1994-4, NAIC Proceedings

⇒ 1991-1992 - SOA - Final Report* of the Task Force for Research on Life Insurance Sales Illustrations, Society of Actuaries --- [BonkNote] --- 142p

(p145) - Regulations and requirements must change to remain appropriate and effective.
- Evolving marketplace and economic conditions necessitate periodic updating of regulations, including rescinding requirements that are no longer helpful.
- The regulations of the early 1980s did not anticipate the product features, payment options and anomalies of the succeeding decade.
- As examples:
  - Illustrations of a vanishing premium for a fixed-premium product depend upon the nonguaranteed policy factors to support premium payments after the vanish year.
  - Should the accompanying guaranteed values be based on the illustrated premium outlay by the buyer or the payment of full premiums in all years?

(p161) - The United Kingdom and Australia have relatively competitive life insurance markets, with many similarities to the North American market.
As in our market, ledger illustrations have been employed for Type B comparative cost and performance evaluation.
- Not surprisingly, these countries have also encountered problems with sales illustrations.

(p172) - 4. Standard Assumptions
- Three possible models have been described in this paper: the illustration of variable life and the illustration practices in the United Kingdom and Australia.
- These models for standardization of assumptions help the buyer to understand that the illustrated performance varies with the underlying assumptions and is not guaranteed.
- The Australian requirement that effects of inflation also be demonstrated for the term of the projection has considerable appeal to the Task Force.
- CONCLUSION: We encourage the AAA and the CIA to consider pursuing this alternative with industry trade groups, professional organizations and regulatory bodies.