Agent - Knowledge

I do not think agents understand the product.

--  Robert D. Hogue, Senior Vice President and Chief Individual Actuary at Maccabees Mutual

1982 - SOA - The Universal Life Update (rsa82v8n22), Society of Actuaries - 16p

  • For a company such as Prudential with thousands of agents, most of whom are not very sophisticated, getting the agent to understand the new products and how these products can be used is essential to the success of a new product.

--  Phillip J. Grigg, PRUCO Life / Prudential

1987 - SOA - Product Development Process -- Bringing New Products To Market Quickly And Efficiently, Society of Actuaries - 22p

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

--  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

  • ...key issues ... perceived by the CLUs and ChFCs responding to the survey as causing the greatest problems for those working in the life insurance industry at the time.
    • #1 - Lack of knowledge or skills to competently perform one's duties
  • Public trust in business is commonly viewed as having two dimensions—integrity-based trust and competence-based trust.
  • An integrity violation occurs when a person acting on behalf of an organization intentionally violates an agreed-upon practice or principle and thus is perceived as dishonest, whereas a competence violation occurs when an individual lacks the skills or knowledge to adequately perform a job.

2011 - JFSP -  The Ethical Environment of the Life Insurance Industry: The Impact of the Recession and Slow Recovery, by Robert W. Cooper, PhD and Garry L. Frank, PhD - Journal of Financial Service Professionals - 15p

  • [re:  Policy Cash Flow Mechanics]
  • These previous comments remind me of a little story.
  • It also relates to one of the comments Judy made, that agents sometimes do not understand the policies.
  • My mother was thinking of buying an insurance policy on my father, and she asked me to speak to her agent.
    • I spoke to him, and it was a Universal Life policy being proposed.
    • I asked about the crediting rate, and then I said, "What kind of cost-of-insurance (COl) deductions are there?"
  • He didn't understand what I was talking about.
  • I said,
    • "Well if you think of this Universal Life policy as a box, then you pour in premiums and your interest credited, and then pull out the cost of insurance.
    • You could credit a high rate, but then at the same time be taking out a high COl, so you would be giving with one hand and taking with the other."
  • And he said,
    • I didn't realize that out of this account you're actually pulling out an amount every month to pay for the insurance, and that could vary between companies.
    • I'll have to talk to the company about that, because I never realized that before.

--  Alan L. Igielski

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

  • Let's go back to the question of understandability.
    • With no standardized format being utilized, many of the illustrations currently in use are far too complex for the average consumer or applicant to understand.
    • In many cases the selling agent does not understand what he is presenting, and this needs to be addressed.

--  Robert E. Wilcox, Utah Insurance Commissioner and Chairman of the Life Disclosure Working Group (NAIC)

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