2021 0602- Doug Andrew – 3 Dimensional Wealth – What Is The Fiduciary Rule In Financial Services?

  • [Bonk: LASER Fund = IUL – Indexed Universal Life Insurance]
  • 2 – Hidden Agenda – 
  • – Who is the best to look out for their own best interest, decision.
  • 3-4 – 2008 – IRAs, 401ks – Lost money – 40%
    • “I could show you how to protect yourself to never lose again when the Market goes down.”
  • Taxes – High or lower in the future
  • 5 – Convert money to tax-free
  • 5 – creating predictable income
  • 4% rule
  • 6 – Hidden Agenda of the DOL –
    • 7 – CFPB – Richard Cordray – 
  • 9 – 30% into US treasuries
  • 10 – I’ve never recommended people invest in a 401k or IRA – 
  • Invest in the LASER Fund
  • 11 – The LASER Fund will knock the socks off of a 401k or IRA

2023 1031 – DOL / EBSA – Fact Sheet: Retirement Security Proposed Rule and Proposed Amendments to Class Prohibited Transaction Exemptions for Investment Advice Fiduciaries

  • 2023 1031 – DOL / EBSA – Fact Sheet: Retirement Security Proposed Rule and Proposed Amendments to Class Prohibited Transaction Exemptions for Investment Advice Fiduciaries, U.S. Department of Labor, Employee Benefits Security Administration  —  [BonkNote] —  [link]  —  7p
  • (p1) – That means that if a retirement investor receives investment advice from a firm or someone and compensates that person for providing that advice, the retirement investor has the right to expect that the person providing the advice is going to act in the investor’s interest, and not in the advice provider’s own interest.
  • (p2) – The Department’s current rule with respect to investment advice has not kept up with important changes in the marketplace. In 1975, when the rule was adopted, the most common type of retirement plan was a defined benefit pension plan, which was primarily managed by professional money managers and funded by employers, who shouldered the risk of poor investment performance. In the decades following publication of the current rule, 401(k)-type plans with individual accounts and IRAs have become the predominant way in which workers save for retirement.  
  • (p2) – In the decades following publication of the current rule, 401(k)-type plans with individual accounts and IRAs have become the predominant way in which workers save for retirement. In 401(k) plans and IRAs, individual retirement investors are typically responsible for making important investment decisions, and they, rather than their employers or plan officials, shoulder the risk of poor investment performance or inadequate savings.  Because most retirement investors are not investment experts, they rely upon the advice of investment professionals, such as brokers, insurance agents, and registered investment advisers on how to manage their retirement savings at some point in their lives. Too often, however, these investment professionals are not subject to ERISA’s fiduciary protections, including ERISA’s key obligations requiring fiduciaries to give advice that meets an expert standard of care (the duty of prudence), puts the customer first (the duty of loyalty), and avoids dangerous conflicts of interest (the prohibited transaction rules).
  • (p2) – Despite holding themselves out this way, however, the advice providers often are not treated as ERISA fiduciaries under the technical requirements of the 1975 rule, and may not be subject to the same duties to a person investing for retirement, even when the advice provider is giving such important advice as whether to liquidate a lifetime of retirement savings held in an ERISA-protected plan and transfer those savings to an annuity or other retirement investment and whether and where to roll over their retirement savings.
    • [Bonk: “Despite holding themselves out this way”
      • 2024 0215 – PIABA – Testimony – Joseph C. Peiffer, President, Public Investors Advocate Bar Association  —  [BonkNote]  —  30p
        • 2024 0215 – GOV (House) – Protecting American Savers and Retirees from DOL’s Regulatory Overreach, Bob Good (R-VA)
    • [Bonk: “retirement savings” – Life Insurance?]
  • (p3) – The Department is proposing that a financial services provider would be an investment advice fiduciary under federal pension law if:
    • the provider states that they are acting as a fiduciary when making investment recommendations.
    • [Bonk:  2021 0602 – Doug Andrew – 3 Dimensional Wealth – What Is The Fiduciary Rule In Financial Services?  —  [BonkNote]  —  [YouTube-13:09]
      • [Bonk: LASER Fun = Indexed Universal Life Insurance]
      • 3-4 – 2008 – IRAs, 401ks – Lost money – 40%
        • “I could show you how to protect yourself to never lose again when the Market goes down.”
      • Taxes – High or lower in the future
      • 5 – Convert money to tax-free
      • 5 – creating predictable income
      • 6 – Hidden Agenda of the DOL –
        • 7 – CFPB – Richard Cordray – 
      • 10 – I’ve never recommended people invest in a 401k or IRA – 
      • 11 – Invest in the LASER Fund – The LASER Fund will knock the socks off of a 401k or IRA
  • (p3) – This proposed fiduciary definition would apply to recommendations to roll over assets from a workplace retirement plan to an IRA if every element of the proposed fiduciary definition is satisfied. Amounts held in workplace retirement accounts often represent the largest savings an individual has, and financial services providers often have a strong economic incentive to recommend that investors roll money into one of their institutions’ IRAs or annuities. Applying the ERISA fiduciary standard in these transactions will provide significant protections for retirement investors.
    • [Bonk: No Mention of Rolling Over 401k or IRA to a Life Insurance Policy
  • (p3-4) -The Department has found that the 1975 rule defining a fiduciary doesn’t meet today’s retirement investors’ expectations.
    • Under the nearly 50-year-old rule, a financial services provider is an investment advice fiduciary only if, among other things, the advice is provided on a “regular basis” and there is a “a mutual agreement, arrangement, or understanding” that the advice will serve as “a primary basis for investment decisions.”
    • As a result, for example, advice that is provided on a one-time basis, such as many rollover recommendations, is typically not treated as fiduciary advice. Yet, one-time advice is often the most important advice the retirement investor will ever receive.

NAIC to DOL

  • 2023 1101 – NAIC to DOL – State Insurance Regulators Work to Protect Consumers Who Buy Annuities; NAIC Releases Statement on DOL Fiduciary Rule Proposal – [link]
    • “We fundamentally disagree with the White House’s characterization of state consumer protections for annuity products. The White House press statement that oversight of these products ‘varies state by state’ and provides ‘inadequate protections and misaligned incentives’ suggests either ignorance of, or willful disregard for, the hard work of the 40 states and counting that have worked diligently to enhance protections for consumers by adopting the NAIC’s Suitability in Annuity Transactions Model Regulation.”
  • 2024 0423 – NAIC to DOL – NAIC Releases Statement on the Final DOL Fiduciary Rule – [link]
    • “We continue to have significant concerns about the potential impact of the Department of Labor’s (DOL) final fiduciary rule on access and choice for American retirees to certain life insurance and annuity products. These products have been recognized by multiple Administrations of both political parties as an important option for retirees to manage their risk of outliving their savings. The final rule, which was rushed through the administrative process at DOL and the Office of Management and Budget with virtually no coordination with state insurance regulators, also discounts the work of 45 states and counting to enhance consumer protections for these products by adopting the NAIC’s Suitability in Annuity Transactions Model Regulation, which extends a level playing field to products sold within and outside a retirement plan.“

2011 0301 – DOL – 1210-AB32 – ACLI – Testimony – Hearing on Definition of Fiduciary – Investment Advice – 9p

  • 2011 0301 – DOL – 1210-AB32 – ACLI – Hearing on Definition of Fiduciary – Investment Advice  —  [BonkNote] —  9p
  • We share the Department’s interest in seeing that plans and participants who seek out and are promised advice that is impartial ultimately receive advice that adheres to the rigorous standards imposed by ERISA.
    • At the same time, we are concerned that the Proposed Rule’s pursuit of this objective interferes with investment sales and distribution practices that are customary in the marketplace, well understood, and commonly relied upon by financial services providers, plans and participants alike.
  • Parties engaged in transactions with ERISA plans and IRAs need clear, unambiguous rules by which to determine their duties and obligations.
    • Financial institutions such as life insurers and their sales representatives should not be treated as fiduciaries under ERISA when they are engaged in selling activities and are clear that they are acting in a sales capacity.
  • As responsible providers, we have an interest in seeing that our customers are well served, are happy with our products and services, and that our customers find them useful to the attainment of their financial goals.
  • 3 – As we read the proposed regulation, the seller’s limitation applies to IRAs.
    • It is common for advisors and agents to engage customers and prospective customers on their particular goals and objectives to better understand their product and service needs. Based on these conversations, an advisor might explain the pros and cons of various investment vehicles including variable annuities, mutual funds, brokerage accounts, banking products, fixed annuities, alternative investments and several types of advisory accounts. Within each of these types of securities and property, advisors/agents can usually recommend several different specific securities that may have different features. The compensation paid by product and service will vary. For instance, compensation charged for executing a stock trade will differ from compensation received for selling an annuity. The seller’s limitation, with an appropriate indication of the seller’s interest, makes it possible to recommend products and services to customers.
    • [Bonk: No Mention of Life Insurance Policies, IUL’s, LIRP’s]

Roccy DeFrancesco

  • stopirarescue.com/ira-rescue-schemes-to-avoid/
    • Back in the day, my industry nemesises, Doug Andrew (missedfortune101.com - [Bonk: Bad Link]) and Marion Snow (stopsittingonyourassets.com/ stopsittingonyourassets.com), told readers incorrectly to remove money from their IRAs to fund cash value life. Why? So readers could move money from a "tax-hostile" environment to a "tax-free" environment.

2001 - LC - Solarchick v. Metropolitan Life

  • 2001 - LC - Solarchick v. Metropolitan Life  ---  [BonkNote]
  • Lead Case: 2:01-cv-00444-DWA
    • Date Filed: 03/07/2001, Date Terminated: 07/11/2006
    • U.S. District Court - Western District of Pennsylvania (Pittsburgh)
  • Member cases:
    • 2:00-cv-00079-DWA-KJB
    • 2:01-cv-00434-DWA-KJB
    • 2:01-cv-00444-DWA
    • 2:03-cv-01323-DWA
    • 2:97-cv-01173-DWA
    • Case in other court: Related, 2:06-mc-00173 - Allegheny County, G.D.No. 99-19797
  • Solarchick, et al v. Metro Life Ins Co, et al 0:2004cv03143 U.S. COURT OF APPEALS, THIRD CIRCUIT 07/29/2004 08/31/2005
  • SOLARCHICK, et al v. METROPOLITAN LIFE IN, et al 2:2001cv00444 PENNSYLVANIA WESTERN DISTRICT COURT 03/07/2001 07/11/2006
  • 111
    • 111-3
      • p24 -
    • 111-9
      • p62 - 1988 0824 - Letter - James L. Rayl (Manager, Tele-services, Central Head Office) to Matthew W. Galbraith, Senior Vice-President, Customer Advocacy
        • It is my strong feeling that Metropolitan has little idea of the extent of its customer disatisfaction.
      • p69 - 
  • 42
    • 42 - METROPOLITAN LIFE INSURANCE COMPANY'S MOTION IN LIMINE TO EXCLUDE EVIDENCE REGARDING THE PENNSYLVANIA, FLORIDA, AND CONNECTICUT MARKET CONDUCT EXAMINATIONS OF METROPOLITAN LIFE INSURANCE COMPANY - 8p
      • p4 - 3 This Consent Order involved only allegations regarding misrepresentations that whole life insurance policies were sold as retirement or savings plans in violation of Conn. Gen. Stat.§ 38a-815. See Connecticut Report at 6 and Ex A to same. 
      • p7-8 - ORDER OF COURT - Plaintiffs' are barred from introducing evidence of the Pennsylvania Market Conduct Examinations of Metropolitan Life Insurance Company, the Florida Market Conduct Examinations of Metropolitan Life Insurance Company, and the Connecticut Market Conduct Report at trial.
    • 42-1 - Exhibit A - 1993 1227 - Pennsylvania Market Conduct Examinations of Metropolitan Life Insurance Company - Filed 04/17/06 - 46p
      • Document 42-2 - EXHIBIT A - CONT'D - 39p
      • Document 42-3 - EXHIBIT A - CONT'D - 42p
        • p10 - 50/50 Plan
        • p18 - Nurses Insured Retirement Plan: (see pages 98-99}
        • Nurses Guaranteed Retirement
        • p30 - TELEMARKETING SCRIPT USED FOR THE TAX-ADVANTAGED BONUS PLAN
          • In a Nutshell:  With IRS intruding on almost all forms of retirement plans will there be any true Tax-Free Retirement income vehicles left for the small business owner?
          • What would you say if we could show you how to have Tax-Free Retirement income with no-out-of pocket expenses to you?
          • p31 - This plan is tailored as Tax-Free Retirement income plan but does provide an outstanding tax-free death benefit should you pass away prior to retirement, its the best of both worlds. In addition it may be one or the last true tax-free retirement income vehicles.
      • Document 42-4 - EXHIBIT A - CONT'D - 36p
      • Document 42-5 - EXHIBIT A - CONT'D - 32p
        • p5 - "flexible premium" - "free insurance"
        • p15 - Letter - MetLife to Insurance Department re: report
          • p16 - Section by Section Analysis
        • p22 - letter - metlife to insurance department re: report
          • p25 - The TAB concept is far too CQm(llic~ted ~o o-,,11 #otttt- tlni "t1!lephone. Th,e; t.cript reproduced at
            p«_gc$ 105 t.o 107 Of tbe: report. ~ ~ ..,hi.ch va:, ne"Ver approved by MetLife-~ a1•o toentions death benefit~.
            indicating ch.at. the product being Q.Old 11n1.s life i ntntra11ce .
        • p31 -
          • rne Report fails to note that all of the replacement transactions it discusses involved internal replacements that is replacements of MetLife policies with other Mett.ife policies which are exempt from the replacement regulations and hence those regulations...
      • Document 42-6 - EXHIBIT A - CONT'D - 30p
        • p6 - internal replacements, illustrations - misleading
        • p7 - guaranteed vs non-guaranteed rates, performance
        • p8 - cashflow, costs, benefits
        • p8-9 - cash accumulation, savings
        • p9 - Although the Report notes that some unapproved field literature does not use the word insurance, there is no evidence in the Report that the presentation of the product at the point of sale was inappropriate or that any  policyholders misled.
        • p11-12 - 
        • p13 - tax-free income = policy loans
        • p16 - 10 The language which was ommitted from the policy form when the transition was due to laser printing relates to the policy's cash value upon surrender and not to whether the policy's death benefit is "free" or "paid-up". The Report does not identify any point pre-sale misrepresentations as to cash values further undercutting the Department's suggestion that this omission was anything other than an accident.
        • p17 - Illustrated Value Tables, Monetary Penalty to the State
    • Document 42 - Exhibit B - 1994 0306 -  Florida Market Conduct Examinations of Metropolitan Life Insurance Company - by Thomas Tew
      • Document 42-7 - Exhibit B - 34p
        • p8 - Those who purchased Plans believed they were making scheduled deposits to their retirement/savings plans. Deposits in round numbered amounts such as $50.00, $100.00, etc., were suggested.
        • p8 - This investigation focuses on management's awareness of, and responses to, certain sales practices of Mets Personal Insurance Unit, a marketing unit comprising career agents, including Urso and his agents, who sell to individuals and small groups.
          • This report does not take issue with the fundamental soundness of Met's whcle life policies, it challenges the manner in which those products were sold,
        • p8-9 - A significant portion of these unapproved sales materials, in addition to those used by Rick Ursos agency force, violated state laws.
        • p10 - Sales scripts and other sales practices used by the sales force were unregulated and apparently unexamined.
        • p10 - Thus, those policyholders who allowed their policies to lapse (a high percentage) lost all their premiums paid.
        • p11 - As is usually thee case with financial deceptions perpetrated on consumers, those harmed are the least equipped to absorb lll0netuy losses. The legal and supsrvisory issues raised in this report 4218 overshadowed by the larger human issue of economic pain and suffering. In view of the unfortunate cirumstances. Wider which
          the losses were incurred, Mat luis, c0111m11ndably, proposed an appropriate plan of restitution and has adopted an innovative compliance program.
        • p13 - IV. DANIEL RICHARD - Rick Orso
        • p13 - Urso was sought out throughout :. Hat to present his sales techniques nationwide in a variety of forums.
        • p14 - 
        • p16-17 - 11. ~ ~g Concept - Savings
          Rick O'.T:so did not develop for Met the concept of repackaging a traditionally unattractive product (Whole Life) into a more popular fom Retirement and Savings Plans . Rather, the idea of selling insurance disguised as Savings was ingrained in Mets marketing culture in the Southeast Territory years before Urso was hired.
        • p18 - 'l'hWI, this Commission structure, standard in the industry, has the potential to create an i:rreconoilablil conflict between the agents need for commission and the customers need tor a suitable product.
        • p19 - Thus, if savings, not life insurance protection, is the client's objective, an annuity is the preferred product.
          • Even more deplorable, however, is that this concept selling approach appealed to a financial need, falsely promised a solution and, in the end, ignored the objectives of the client.
        • p19 - Urso preferred to rec1'1!it agents with no prior insurance experience who he could subject to rigorous training that refined the techniques taught at the career success schools.
        • p23 - In January 1991, Bertke wrote to Urso regarding his authorized sales literature stating that the brochure misleads people, a violation of insurance laws in every state. •ll' Bertke's statement was accurate in 1991 and is accurate today.
        • p24 - Robert Cr1JIUllins, head of Met's Personal Insurance Unit, was aware of the problems with the unauthorized sales literature, and personally intervened to make sure that SEHO's selection as Office of the Year for 1990 did not
          embarrass Met.
        • p25 - TluJH p<'OlpaCtllf lott•H are hl.9hly quaotl.onlllle fot th• toll.owl.nq :r-aaao:11;
        • ...................
      • Document 42-8 - Exhibit B - 43p
        • p2 - president who reported directly to Mr, Maurer, and stated thats I'm Mt. vaq- enamored vlth ■e111n9' llf• 11aur&nee &■ '• ■avlng.-·plu with life l.nauiaace a, a banua' • And thl.e ia 1:h• t.ype of approach, a ■ ■paoUlecl in the v&rloue ■ aJ.e ■. ma.terial.■ ., ancl presumably al.Ila in face-to-face pi:etentaacl.on■ , whlch ha ■ bea t:he p:-oblem wl.t.b· 'nur ■ea• matter. But it ala a le r1f•• co=pany-vld.a.
        • p4 - At the meeting, Urso claimed he was a victim of circumstances and was not a renegade manager. In an emotional presentation, he argue.d that his sales techniques did not differ from those prevalent th,:oughout the Company and that he was being singled out for harassment by an incompetent legal department unable to
          effectively process requests ta approve sales literature, p8 - Met's initial public position was that the objectionable sales practices were 1.iJDited to the Tampa, Florida office, an assertion that failed.
        • ⇒ p8 - Countless Met training documents reiterated the theme that insurance sells best vhen disguised as savings or retirement planning.
        • ⇒ p8 - "even premium sales" i-amiw:A Ci•••• $25 • month,- $50 a contb,- etc.). someone who pu:cc?iues • lnnranca ln u odd face amount 1■ .focu ■1.ng on. tha aa.ving ■ a■pact. of the pl&a. :ather than on the Uaut&n~• ■■ peat .of a plan.
        • p13 - XII, The Heart of the Problem
          • The laclc of a timely reuponse to the t!rso problem cm be attributed to Hat's marketing culture, AS ststed 1D II memor1111dam dated:February 24, 1993, from IIJ:uce Hemer to 'l'ho1111111 KcDemott, the problem of selling life insurance 1111 a •1111vinga plan• with life insurance as a •bonus• was •rife, company. wide,• Urso was only
            remarkable because he effected a national singl-product approach,
          • 'l'he sales force toolc advantage of its position as generator of sales and profits for the Company and enjOJ(ed a free band in the marketing of products, Met taciUy condoned natl.onwide efforts of its aggressive sales force to s_ell whole· life policies disguised as avings or Retirement plans.
        • p15-16 - A, Even Premium Policyholders
          • The whole life policies sold have •even• premiums (ending.in 5 or 0) and "odd" face lllllOUnts.
          • such
            •even premium• policies are in contrast to the great majority of
            whole life insurance polici;!s which are sold principally for the
            death .:enefit and which tend to have an even face 111110unt and an cdd
            premium.
          • It is reasonable to conclude, therefore, that any policyholder misled into the pu:chase of a whole life policy as a retirement or savings plan will, be with few exceptions, an even premium policyholder.
          • Second, purchasers of policies with a face value of $1,000,000 or more are excluded. These policyholders are likely to be financially sophisticated; are almost certain to investigate the nature of the product being purchased, and are likely to be required to take a full medical examination as a condition to obtaining the policy. 
        • p19 - E. Size of the Class
          • The size of the class oa be notified is approximatlely 60,000 policyholders (including lapsed policyholders, with premiums paid through December 1993 of more than $76 million.
        • p20 - Met is a defendant in a class action lawsuit filed in United States Distdct Court for the Middle District of Florida,
        • Document 42-9 - Exhibit B - 44p
          • p17 - IRS, 59 1/2 penalty
      • Document 42-10 - Exhibit B - 36p
      • Document 42-11 - Exhibit B - 36p
    • Document 42- Exhibit C - 1993 1014 - Connecticut Market Conduct Report - George M. Reider, Jr., Insurance Commissioner - Submitted by Richard Blumenthal, Attorney General of Connecticut
      • Document 42-12 - Exhibit C - 67p
  • Case 2:01-cv-00444-DWA- Document 184-1 - Filed 05/17/06 - 38p
    • ⇒ Deposition - 2002 0802 - Harry P Kamen - In The Matter Of: Hazen v. Metropolitan Life - <Case Number - Any Information>
    • p17 - [20] Q: And if you give someone permission to use what you were calling an unauthorized document, does it not then become an authorized document?
    • p18 - [2] Q: What procedural safeguard was in place to guarantee the integrity of what was being said orally to the customer?
      • p18 - A: [13] A: There's no taping, there's no hidden camera, so you don't know what's happening.
    • p19 - [4] Q: Were you aware that Mr. Urso not only instilled training at his managerial office on his sales personnel, but he was invited to go other places throughout the country to train people to sell this particular product?
    • p19 - 1121 Q: Mr. Kamen, the Tew report dealt specifically with the Urso office and the problems there, but do you recall that it also made findings as to what was occurring nationally within MetLife?
      • A: I recall it did discuss other, yes, it did have- discuss other instances-
      • Q: What !'d like to do -
      • A: - of impoper sales approach letters.
      • MR. DePASQUALE: What I'd like to do is show you what we're going to label as Kamen Deposition Exhibit 1, and it's going to be page 41 of the Tew report. I'd like you to take a look at that. Why don't we do it as a two-page Exhibit with a cover page and then with page 41.
    • p19 - Q: Okay. Mr. Tew has a section in his report on page 41 under Roman numeral XII which is described as, quote, the heart of the problem, and in the first paragraph of that Mr. Tew states that the problem of selling life insurance as, quote, a savings plan with Iife insurance as, quote, a bonus, was, quote, rife companywide. Did you accept that, when this report came out, as a fact?
      • A: No, I didn't.
    • p19 - A: You know, if they had a free hand, we would have been in trouble much before this.
    • p20 - Q: ...the last sentence of the third paragraph, which is the last paragraph, Met tacitly condoned nationwide efforts of its aggressive sales force to sell whole life policies disguised as savings or retirement plans. Didn't Met tacitly condone those efforts nationwide?
      • A: No, I don't agree with that. I mean, there were cases where it happened, but it was not tacitly condoned, where cases were brought to anybody's attention, maybe other than in the southern territory but, you know, this is a conclusion he reaches, tacitly, from the assumption that the earlier facts are correct, which I don't agree with.
    • p20 - 99 - - [6] A: Now, two things, one, I said it was basically accurate, had to do with what it had focused on, which was Urso and his selling techniques and the nature of the preapproach letter and the fact that he got away with it for awhile. What I'm disagreeing with is saying that it was the heart of the problem for the whole company, that it was the culture of the company, that the majority, overwhelming majority is implied here, of the sales force was violating all the rules, all the statutes, and that was the reason for the success of the company.
    • p20 - 101 - Q: Well, he does not say that, Mr. Tew, He says, tacitly, which means that the words you just used may never have been conveyed, but by the silence of MetLife, there is consent.  I mean, you're familiar with the Latin maxim, having gone to Harvard qui tacet consentire, he who is silent gives consent?
      • A: No, we studied the whole thing in English.
    • p20 - 101 - A: It relates to all ow- efforts in terms of training and meeting and issuing, you know, and distributing regulations in terms of the results, in terms of the policyholders' satisfaction, which is rifer than this. We have enormous policyholder satisfaction that results - it's evidenced in a lot of things. Nobody asked me to make a study today. It would take me a week maybe.
    • p20 - 102 - A: Based on my overall impression, and my overall impression of what I read in 1993 was that it was okay, we could live with it.
      • p20 - 102 / 103 - A: --- We 're talking about page 41, with the evidence that Tew had and with the evidence that we had, if we were litigating this particular thing, but we were in the position of, here's the report, it wasn't nearly as bad as we  thought it could be, and so that was that, we just had to live with it.
      • We were in the process at this time of putting in the new compliance program and negotiating with all the states on penalties and fines and all that stuff.
    • p20 - 103 - Q: Well,how much worse could it be where it states that Met tacitly condoned nationwide efforts of its aggressive sales force to sell whole life policies disguised as savings or retirement plan?
      • MS. TAYLOR: Objection as to form.
      • BY MR. DePASQUALE:  Q: Could you think of anything stated on a national base that could be worse than that?
    • p21 - 106 - ...Maurer reported to Robert Crimmins...
    • p21 - 107 - ...Tom McDermott...
    • p22 - 110 - A: ...but I think he's referring to Urso's office, that the selection of Urso's office as office of the year did not embarrass Met.  - [Bonk: Crimmons, 1990]
    • --- A:  ... senior vice president in charge, Rudy Michaud...
    • --- Q: Well, I'm still trying to get to why Mr. Maurer was fired.
    • --- Q: ... Pennsylvania report of sales practices that was issued by the Pennsylvania Insurance Commission's office, I believe by Cynthia Milewski...
    • --- Q: Inconsistent.
      • A: It was, I agree with that.
      • Q: Was it incoherent?
      • A: It was incoherent. I didn't know what they were talking about, when I read it, in many instances
      • Q: And therefore the third would follow as well, it arrived at unwarranted conclusions?
      • A: I'd have to look at it again. As I say, what I remember is it was a poorly drawn report with incoherence and inconsistency. Whether it was totally unwarranted, I'd have to look at it.
    • ---  Q: Well, I want to show you a transcript of a deposition that you gave in the case of Carothers versus MetLife on March 7, 1995 and ask you to look at... (Document marked Exhibit Kamen-3 for identification.)
    • p23 - Q: Under what decision-making process was the determination made by MetLife to pay $ 1.5 million to the Commonwealth of Pennsylvania as a penalty resulting from a report that was inconsistent, incoherent and recited conclusions that were unwarranted?
      • A: Well, you know, you try to argue on the fine, but they're in control and we're on the ropes.
    • --- Q: In addition to the $1.5 million fine there was an excess of $20 million in restitution that was made by MetLife to Pennsylvania policyholders because of the Pennsylvania Insurance Commission's investigation,  correct?
      • A: ...we came after the people and said, if you feel you've been deceived, you get your money back, you can get an annuity if that's what you want, your money with interest, and all you have to do is tell us, that's all.
    • ------
    •  
    • --- A: I mean, it was unbelievable to us that three or four insurance departments could have complained
      about it and nobody in the home office knew about it.
    • p24 - A: Urso ...had a branch of 10 people that grew to 125 people in a year or two, another flag. Everyone said, wow, what a great leader he is; but when that happens, unusual success means a special investigation, special care, and that's why he had the success, he was cheating orat least in his - yes, he was cheating. So I've forgotten a lot of the facts over the years, but I still remember my emotions.
    • --------------------------------------------------------
    • p24 - [
    • --- A: single premium life, life at 95, which is whole life, and universal life are excellent vehicles for building your grandchildren's college education fund.
    • --- Q: All right. Would it be a deceptive practice to sell to somebody a universal life policy for a grandchild
      under the pretense that that universal life policy is in fact a college funding savings program?
    • --- [Illustrations]
    • ---  Q: MR. DePASQUALE:Okay. I'm going to show you a document that we'll label as your Deposition Exhibit 5. It's a memo, purports to be a memo, at least, from a senior vice president out of the head office
      operation of MetLife, and it's dated June 29, 1977. (Document marked Exhibit Kamen-5 for identification.)
    • [piggybacking = FIP]
    • 26 - Q: Do you agree with Mr. Maurer's assessment that the field employees act, in general, towards the policyh.older in overseeing financial security, No. 1, and No. 2, acting in a fiduciary capacity?
      • A: Yes. I don't know what he means by fiduciary capacity. I think that he is referring to things
        like handling money, policy payment checks, and so forth, so, you know, I don't think he means that the relationship between a sales rep and a policyholder is a fiduciary relationship. I think Maurer was talking about just the trust that policyholders have in the agent when he's handling their money or claims or what have you.
      • ...
      • MS. TAYLOR: Objection as to form. It calls fora legal conclusion and, as you know, what is a fiduciary varies from Jurisdiction to Jurisdiction.
      • A: Right, and in that respect I would say that the relationship between a policyholder and a sales rep is not a fiduciary relationship. The laws governing fiduciary relationships do not apply in general to that relationship.
    • p26 - Q: Okay.If we can go now to the next document - (Document marked Exhibit Kamen-8 for identification. --- October 17, 1979 - Mauer)
    • p27 - Q: Did that safeguard, that mechanism that he established in October of 1979, get dismantled at some point prior to 1993? --- [he = Mauer]
      • A: Prior to 1988 or something like.
      • Q: It did get dismantled?
      • A: I mean, '93, the problems, for example with Urso started in '88, '89.
    • p27 - A: ... When interest rates are 15 percent and the policy loan has a guaranteed interest rate, you know, a maximnm of 5 or 6 percent, 5 percent in New York, then 6, it's financially desirable often for the policyholder to borrow at 5 percent when rates are 15 percent and buy another policy or buy stocks or buy bonds, and that is a severe cost to the company. 
    • p28 - A: ... Were you aware that Mr. Athanassiades wanted to, if he could, eliminate replacements or FIPs? - [president and chief operating officer]
    • p28 - [Company vs. Sales Rep vs. Consumer - Who Benefits / Loses?]
    • p28 - Q: You did testify at that time the red flag watermark of 15 percent did ring a bell with you as something that was ... companywide.
      • A: Yes
      • Q: Were you aware that in the late 1980s into the early 1990s there were some offices in Pennsylvania that had replacement ratios as high as 45 percent, some higher?
      • A: No.
    • p28 - Q: Now, inaddition to his concern, by his I mean Mr. Athanassiades, his concern about the replacement of policies, do you recall an April 1994 address, speech, given by Mr. Athanassiades at the president's conference, which I believe you were present at, in which Mr.Athanassiades stated, and I'm quoting, let's be frank with eacn other, since the early 1980s we, the industry, and MetLife have tended to highlight the savings/investment attributes of the product instead of what should have been emphasized, which was the fact that it was life insurance.
    • p28 - A: [History - UL, etc]
    • ------------------------------------------------------
    • p32 - Q: Did the replacement problem within Metropolitan accentuate or spike with the introduction of universal life in the early 1980s?
      • A: I'm assuming the correctness of this memo, and the memo does say that the introduction of universal life not only Metropolitan but the industry has heightened the concern with replacement and a measure here is provided to help MetLife's salespeople replace the customer's universal life policies where another company is seeking to replace --- [MORE] - [one-page memo dated December 5, 1983.]
    • p32 - (Document marked Exhlbit Kamen - 16 for identification.) -
    • p33 - Q: There's been a number of times that we referred to one of the safeguards that MetLife relied upon with the sales force was the honesty and integrity of the sales force.
      • A: Right.
    • p33 - Q: This memo's saying, we discontinued sending Mr. Maurer's letter back on April 3, 1980, and we're not going to send it anymore because, quote, we do not need to tell people we expect them to be honest.

-----------------------------------------------

    • p35-36 - A: Well, this looks like the fines or penalties paid by MetLife as a result of Multistate determination.
      • p36 - A: This is the National Association of Insurance Commissioners
    • p36 - Q: Was that the position of MetLife in the payment of this, that the states were greedy?
      • MS. TAYLOR: Objection as to form.
      • MR. DePASQUALE: I didn't use the word greedy, Ms. Taylor.
      • MS. TAYLOR: I know, but l don't think you were clear.
      • THE WITNESS: That's a personal view. I don't think that's the position of MetLife.
    • p36 - Q: Based·upon everything you know today, do you still hold to that personal view?
      • A: Yes, I still hold to that personal view because the amount of the fine is in relation to fines previously paid by insurance companies for all kinds of things as excessive and an insurance commissioner, who I won't name, told me that a number of the insurance commissioners thought the fine was excessive, but the Florida Commissioner insisted.
      • Q: Well,you're here under oath. Who is this insurance commissioner that told you that the fines were excessive?
      • A: I have to say because I'm under oath?
      • Q: This isn't a private conversation. We're doing a deposition.
      • A: The New York State Commissioner.

Rick Urso

  • Daniel Richard Urso

20 Apr 1992, Mon Tampa Bay Times (St. Petersburg, Florida) Newspapers.com

  • 1993 – LC – Horton v. Metropolitan Life (def. Rick Urso)
    • 8:93-cv-01849-SDM
    • Florida Middle District Court
    • Date filed: 11/01/1993, Date terminated: 10/25/1994, Date of last filing: 06/23/2011
    • Document 1 – Filed 11/01/93 – Complaint – 37p
  • 1994 0603 – The Tampa Tribune – Fired Exec Urso Sues MetLife, by Cheryl Jackson – [link-Newspapers.com]   
    • Former Metropolitan Life Insurance Co. manager Rick Urso sued the company, executives and former sales representatives Thursday, claiming MetLife reneged on a $1 million severance agreement and instead made him into a public scapegoat.
    • The company is using Urso as a scapegoat, promoting or rewarding other managers who used similar sales techniques, Weinberg said.
      • “He was the No. 1 manager. He was a role model. His face was on the cover of brochures. Now they say they didn’t understand what his techniques and approach were?”

1994 0106 – WSJ – Met Life Got Caught; Others Sent Same Letter, by Greg Steinmetz

Agents for met life weren’t the only ones who tried to sell life insurance to nurses without telling them it was life insurance so did agents for Prudential, New York Life and Allstate.

Letters sent by agents of the other three companies Prudential Insurance Co of America, New York Life Insurance Co. and Allstate Corp are virtual reproductions of letters sent by Metropolitan Life Insurance Co.

Agents from the Tampa Fla. office which sparked investigations by Insurance Regulators the letters are all headed by a variant of the phrase “Nurse’s Retirement Plan”.

Since September Regulators in Florida and a dozen other states have been investigating whether Met Life’s Tampa agents duped nurses in Florida and elsewhere into buying life insurance by calling it a “Retirement plan.”

Florida’s insurance department is now also looking into New York Life’s Sales Letter.

No one is certain who first dreamed up the promotion but the letters Illustrate how agents in addition to mimicking one another sometimes don’t refer to their product as insurance emphasizing instead the savings aspects of the plan failing to describe an insurance product as insurance is Prohibited by state consumer protection laws.

The controversial nurses’ retirement plan is a twist on an increasingly popular life insurance marketing program known as the Private Pension Plan. The term is simply another name for life insurance products that have both a death and an investment benefit it’s just a hook, said Glenn Daily a New York Insurance Consultant. … It’s marketing puffery 

Similar programs have targeted beauticians small business owners and other groups whose employers don’t provide pension plans.

Agents for most insurers sell private pension plans most say they are careful to tell customers they are selling insurance and only offer it to people who need both life insurance and savings.

Met concedes that some of its agents went too far and has already offered refunds to up to 60000 policyholders nurses and others who may have unknowingly bought Life Insurance.

The company expects to refund as much as 40 million.

The MetLife and New York Life investigations are pending Insurance Department officials say they aren’t investigating Allstate or Prudential.

All four companies say any questionable sales practices within their Organizations aren’t widespread.

Agents have found that renaming insurance and stressing its tax benefits over its death benefits is a successful sales tactic people who don’t want insurance will buy a “Private Pension Plan” said Mr. Daily.

In addition people who wouldn’t talk to a life insurance agent will buy from a Financial Adviser which is what some agents who sell “Private Pension Plans” call themselves. Anything is better than calling oneself a Life Insurance Agent in terms of public relations said James Hunt, an Actuary with the National Insurance Consumer Organization. But Agents who fail to identify themselves as such whether in mailings over the phone or in Person are breaking the law said John Calagna a spokesman with the New York Insurance Department.

To be sure Life Insurance can be an appropriate form of savings but it’s most useful for people who need financial protection in case of untimely death.

This is something people use all over the industry said Julian H. Good, Jr., an Insurance Agent in New Orleans who last year delivered a speech on “Private Pension Plans” to an industry sales conference it’s appropriate if it fits the client’s situation.

Mr. Good who has been an agent for 12 years with various companies including Mutual Benefit Life Insurance Co. and MetLife says he is sickened by the abuse of the concept it turns my stomach he said they were exploiting what was a good and effective idea.

Met’s Tampa office was run by Rick Urso who in 1992 earned 946,000 selling Life Insurance. Mr. Urso’s success was noticed by managers of other Met Offices who asked Mr. Urso to make presentations to their agents. 

A Videotape of one Urso presentation was mailed to Met offices across the country.  Mr. Urso himself was featured as a success story in Met’s internal publications.

But when stories of the Tampa office investigation came to light several weeks ago Mr. Urso was dismissed through his attorney Mr. Urso denies he did anything wrong and says his sales methods were commonplace at MetLife.

Met denies the contention.

In the case of New York Life the letter was sent by an agent in Tampa, Steven Ingram.

New York Life says Mr. Ingram sent the letter without its authorization and adds that mailings were halted before any sales resulted

Mr. Ingram who still works for New York Life couldn’t be reached for comment in response to the Florida investigation.

New York Life has hired a Law firm to investigate its sales practices in Florida.

Prudential says the agent who sent its letter Ronald Schram who worked in Pittsburgh is no longer with the company and that Mr. Schram violated Company rules by sending a letter not approved by the home office in Newark.

Mr. Schram declined comment.

The Allstate letter was written by Tampa agent Jesse Hill.  Mr. Hill who is still employed with Allstate didn’t return phone calls for comment.

Allstate said about 300 of the letters were sent out and that Mr. Hill violated company rules by sending a letter not approved by headquarters.

  •  Nurses Guaranteed Retirement Savings Plan
    • Your present nursing position
    • You Will Not lose your retirement benefits metropolitan should you become Disabled.
    • Nurse’s individual retirement plan retirement program with you to help you reach your financial goals make your deposits for you.
    • Nurses insured retirement plan program can stay with you to help you reach your retirement goals by Allstate should you become disabled.
    • Nurses insured retirement plan can stay with you to help you reach your Retirement goals by Prudential should you become disabled