Daphne Bartlett

  • Carroll R. Hutchinson: If you had the opportunity to make two changes
    in this regulation, other than to defer its enactment, what would those two changes be?
  • Daphne BARTLETT: The change I would make would be to scrap it and start over.

1995 - SOA - Sales Illustrations, Society of Actuaries - 14p

  • 1981 - SOA - The Life Insurance Business---The View of Consumerists, rsa81v7n17, Daphne Bartlett, Moderator, Society of Actuaries - 16p
  • 1988 - SOA - Dear Editor: Life Insurance Illustrations: A Call to Action, by Daphne Barlett, Society of Actuaries - 2p
  • Dear Editor: Life Insurance Sales Illustrations - A Call to Action
    • We have reached the stage where a life insurance sales illustration is hardly worth the paper it is printed on.
    • Yet thousands of agents are confidently presenting these illustrations to frequently unsuspecting clients.
    • I have yet to discuss this issue with anyone in the industry - home office or field - who doesn’t agree that the current situation is a mess.
    • But everyone also agrees that no single company can try to institute change by, withdrawing from the illustration game.
    • Sooner or later, surely, the whole house of cards will come tumbling down.

--  Daphne Bartlett

1988 - SOA - Article from: The Actuary June 1988 – Volume 22, No. 6 - 2p

  • A Few Comments on Illustrations. by Alan Finkelstein
    • I read with great interest Daphne Barletts letter in the June 1988 Actuary.
    • Having worked for years on illustration proposal systems for universal life. interest-sensitive whole life, deferred annuities. and SPIAs I feel that a few comments are in order: (p14)

 1988 11 - SOA - The Actuary. Society of Actuaries - 16p

  • I'm a member of the NAIC working group that developed this regulation and I am terribly disappointed.
  • I have been interested in the illustration issue for probably 15 or 20 years, and some of you may know that when I became President of the SOA, the first thing I did was establish the task force that developed the report on sales illustrations.
    • Tragically, what's come out of this process doesn't do the
      job. Two weeks ago in the National Underwriter, there was a report of the working group's meeting in Philadelphia, and on the same page was a writeup about an agent who had won a very large amount of money from his company. - [Bonk: Crown Life v Casteel]
    • Apparently, he never understood about "vanish" illustrations and got into trouble with his clients.
  • All of this, of course, happened during the 1980s when illustrations were presented using the high interest rates at the time.
    • They all fell apart because interest rates went down.
    • Now interest rates didn't go down because actuaries were being aggressive. Interest rates went down because they went down; actuaries had nothing to do with it.
  • Policyholders were disappointed, because you'd much rather believe that you will receive the $5 million shown in the bottom right-hand comer of the illustration than perhaps a more realistic number.  

--  Daphne D. Bartlett

1995 - SOA - Sales Illustrations, Society of Actuaries - 14p

  • I'm a member of the NAIC working group that developed this regulation and I am terribly disappointed.
  • I have been interested in the illustration issue for probably 15 or 20 years, and some of you may know that when I became President of the SOA, the first thing I did was establish the task force that developed the report on sales illustrations.
  • Tragically, what's come out of this process doesn't do the job.

--  Daphne D. Bartlett

1995 - SOA - Sales Illustrations, Society of Actuaries - 14p

  • I think it's probably too late for anything to be done, but I wonder why there is such a rush.
  • We can do a better job.
  • We can prepare a regulation that addresses life insurance annuities and variable products all in one, and I think there are many possibilities to redefine what an illustration is and what it should contain.
  • Illustrations do not have to be current scale or disciplined current scale forever.
  • Can you think of anything else that is represented as continuing the status quo forever?
  • I think that there are ways that we could develop a regulation that would keep all companies on a level playing field so that nobody would be unfairly advantaged or disadvantaged, and would benefit the consumer and achieve the real objective of this regulation which is to not mislead.

1995 - SOA - Sales Illustrations, Society of Actuaries - 14p

  • Illustrations, prior to this new regulation, have disclaimers on them that say the numbers are not guaranteed.
  • Now, think about what would happen if this regulation had been in effect ten years ago.
  • The same article would be appearing in The National Underwriter.
  • Maybe it wouldn't have used the word "vanish," but it might have used "disappearing" or any other word you can think of that means the same thing.
  • I think that the NAIC group has labored very hard and come forth with nothing much, but I think we had an opportunity.
  • At this time, interest rates are at somewhat of a manageable level, they aren't at the 12-14% level that existed in the mid-1980s.
  • We'll all be gone when interest rates get up to that level again.
  • When they start to go down again, it will be proven that this regulation doesn't work.

--  Daphne D. Bartlett

1995 - SOA - Sales Illustrations, Society of Actuaries - 14p

  • Ms. Bartlett said that since she had first reviewed the regulation draft three weeks earlier she had some ideas about what should be included in the model in the area of a sensitivity index.
    • She said the interest component of an illustration was different from the other components (mortality, expense, persistency) because the other elements were largely controlled by the company, but the interest component was dependent upon the economy at large.
    • ^She said it was important to recognize that companies could not have large difference from each other in interest rates.
    • She suggested grading in the interest rate over a period of time to standardized assumptions.
    • She said that this would be an appropriate substitute for the sensitivity index.
    • She saw several advantages.
      • It eliminated the portfolio versus new money problem because one could grade down, and the other might need to grade up.
      • She said the numbers generated by the illustration would be more realistic, and it might actually create a situation where the company's results would be above illustrated values.
    • She also said this would minimize the need for in-force illustrations.

1995-1, NAIC Proceedings