Solutions

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  • If there is a better way, let it be sought and may it be found --
    • and let it be to the credit of our industry that we are the ones to find it and to provide it for the consumer.

--  Wilfred A. Kraegel


1975 - SOA - Ordinary--New Products, Society of Actuaries - 18p

  • Actuaries can do lots of things.
    • We can provide the field with a clear description of the policy and how it works.

--  Bruce E. Booker (a member of the American Council of Life Insurance (ACLI) Task Force on Cost Disclosure and the National Association of Insurance Commissioners (NAIC) Advisory Group on Illustrations

1993 - SOA - Sales Illustrations - We Can't Life With Them, But We Can't Live Without Them!, Society of Actuaries - 28p

  • Solutions include:
    • new compensation structures,
    • a different delivery system (perhaps direct mail) for
      • term Insurance,
      • and fresh products such as ‘total life” (essentially term insurance with a side fund). 

1980 - SOA - States Club Examines Future of Life Insurance Delivery, by Ira L. Boyle, Society of Actuaries - 2p

  • ... the policy summary should include a statement on the point at which the policy will expire based on the policy guarantees and the anticipated premiums shown in summary.
    • ...Universal Life should be treated as a life insurance plan with a nonguaranteed cost element for cost disclosure purposes.

--  (ACLI) presented a paper on cost disclosure for universal life products - 4p

1982-1, NAIC Proceedings  

  •  If we are going to have a group of consumers of our products who are satisfied with what they get, we have to meet their expectations.
  • Obviously, there are two adjustment points whereby that can be accomplished.
    1. One is that you can change the outcome to match the expectations.
    2. The other is to change the expectation to match the outcome

-- Robert E. Wilcox - Chairman of the Life Disclosure Working Group (NAIC)

1994 - SOA - Problems and Solutions for Product Illustrations, Society of Actuaries - 28p

  • It is of great importance at the present moment that sound principles on the subject of insurance should be widely and rapidly disseminated.
    • Whether they act by producing conviction, or opposition, a step is equally gained:  nothing but indifference can prevent the public from becoming well acquainted with all that is essential for it to know on a subject, of which, though some of the details may be complicated, the first principles are singularly plain.
    • Public ignorance of the principles of insurance is the thing to which these advertisements appeal:
    • Whether they act by producing conviction, or opposition, a step is equally gained : nothing but indifference can prevent the public from becoming well acquainted with all that is essential for it to know on a subject, of which, though some of the details may be complicated, the first principles are singularly plain.

1838 - Book - An Essay on Probabilities: And  on Their Application to Life Contingencies and Insurance Offices, by Augustus De Morgan - 306p-GooglePlay

  • ... could we use some of the Society of Actuaries resources to do some educational pieces, such as a videotape?
  • I'm not sure a booklet does it.
  • But a videotape that talks about the Society of Actuaries, utilizing Society of Actuaries resources.
  • We are a research body and an education body to help educate the public on why these are not guarantees, and how they should be looking at these in terms of flexibility.
  • I'm not talking about numbers now.
  • I'm talking about perceptions and concepts regarding the nonguaranteed elements of a contract.

-- Barbara J. Lautenheiser

1992 - SOA - Life Insurance Sales Illustrations, Society of Actuaries - 16p

  • Commissioner Wilcox also spoke favorably of a new provision in California where the illustration of non-guaranteed elements must show the lesser of the amount being currently paid, the amount the company is currently earning, or the amount the company can expect to earn.

1994-3, NAIC Proceedings

  • I'd like to stress that agents don't pretend to know the answers.
  • It is our intent to ask for your <actuaries> help because we're currently living with problems that lack solutions.

--  Robert Nelson, chairperson of the National Association of Life Underwriters (NALU) Task Force on Illustrations

1993 - SOA - Sales Illustrations - We Can't Life With Them, But We Can't Live Without Them!, Society of Actuaries - 28p

  • It is probably true that most of the information needed is already in illustrations but doesn't get to the consumer because:
    • of their limited attention span
    • or because of how the information is presented.
  • Though it is usually not stated so simply, in the area of llustrations, format not content is the key to improving disclosure.

--  Bradley E. Barks

1993 - SOA - Sales Illustrations - We Can't Life With Them, But We Can't Live Without Them!, Society of Actuaries - 28p

 

  • If I bought a camera down the street and when I got back to my hotel room, the shop owner called me and said, "Oh, by the way, you owe me another $100 for that camera," I would feel exactly like many of the vanishing premium victims have felt.
    • I understand the lawsuit.
    • I think we could have avoided the problem through effective reillustration.

--  Christopher H. Hause

1995 - SOA - Current Developments Surrounding Regulations and Standards of Life and Annuity Products, Society of Actuaries - 18p

  • This was an optional idea that we called "Illustrations As Road Maps."
  • The concept is that instead of letting the actual performance of a Universal Life policy diverge over time further and further from what was originally illustrated, you could send policyholders a notice each year on the anniversary, if the results are below what was illustrated.
  • A letter would state the need to pay an additional amount to get back to what was illustrated, because interest rates are lower. This would have two advantages.
    • First, it would keep people on track with their illustrations.
    • Second, it would help people understand the workings of their universal life policy." 

--  John Keller, Northwestern Mutual

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