Bipartisan Policy Center.

  • 2017 04 – Bipartisan Policy Center – Improving Insurance Regulation – 68p
  • This paper is a product of the Financial Regulatory Reform Initiative (FRRI) at the Bipartisan Policy Center. Since 2012, FRRI has been assessing the progress of post-financial crisis reform to determine what is and what is not working and making recommendations to improve the financial regulatory system.
  • Improving Existing Federal Oversight
    • 2. Monitor State Regulation-Congress should require an annual report from FIO on the activities and governance of the NAIC and state insurance regulation and hold hearings on each report.
    • 3. Make NAIC Policymaking More Transparent-The NAIC should adopt Administrative Procedures Act (APA)-like standards and Government in the Sunshine-like standards to ensure greater transparency in policymaking.
  • Task Force Members
    • Robert E. Litan – Adjunct Senior Fellow, Council on Foreign Relations
    • William H. McCartney – Former President of the NAIC and Nebraska Director of Insurance
  • Project Co-Chairs
    • Martin N. Baily – The Bernard L. Schwartz Chair in Economic Policy Development and Senior Fellow and Director of the Business and Public Policy Initiative at the Brookings Institution, and a former Chairman of the President’s Council of Economic Advisers
    • Phillip L. Swagel – Professor at the School of Public Policy at the University of Maryland, and a former Assistant Secretary for Economic Policy at the Treasury Department

Transferring Information - Company to Agent

  • Crown Life - Casteel
    • mp3
  • 1994 03 - InsuranceObserver.com - Western National's Deceptive Memo: (Western is Incomplete disclosure on rating) - 12p 
    • p4 - THE FEBRUARY ISSUE of the Insurance Forum contained a memo from Western National Life's p4 - marketing department to its agents summarizing its ratings. 
    • Joseph Belth, the editor of the Insurance Forum, believes that the memo was deceptive for three reasons.
      1. ... 
      2. Joseph Belth wrote to Western and asked about the omissions in the definitions. Western responded by saying that "our Field Up-date publications are intended for the sole use of, and are distributed only to, our...agents... These summaries [were not] intended for clients."
      3. Belth's response: "Outrageous...lnformation is deceptive if it gives recipients an erroneous impression of important relationships...A company has an obligation to provide nondeceptive information to all its constituencies, including its agents." Indeed.

Insurance Observer

  • insuranceobserver.com/
    • Schiff’s Insurance Observer: The World’s Most Dangerous Insurance Publication™.
    • originally called Emerson, Reid’s Insurance Observer
    • David Schiff
  • 1998 05 – InsuranceObserver.com – 9p
    • Who Owns a Mutual Insurance Company –
    • The Devil Inside Sandy Weill
      • Indeed, we were unaware that Sandy Weill, Travelers’ chairman and CEO, was such a bluenosed prig, especially in light of Weill ‘s own obscene behavior: the many hundreds of millions of dollars of options he’s been granted; the eyesore five-story neon orange umbrella logo he emblazoned on the company’s New York headquarters; and his executive responsibility for the despicable sales practices of Primerica Financial Services, the sleazy life-insurance bucket shop formerly known as A. L. Williams.
  • 1994 08 – InsuranceObserver.com – It Ain’t the Meat, It’s the Motion: Life insurance, solvency, deception, and ratings, Vol. 6, No. 3 – 12p

https://www.insuranceobserver.com/PDF/1993/120193.pdf

Primerica – Joseph Belth

  • Book – the Insurance Forum – 
    • Primerica – North Carolina
  • josephmbelth.com/2016/07/no-172-herbalife-federal-trade.html
    • The Primerica Angle
    • Primerica, Inc., the successor to the A. L. Williams organization (ALW), sells life insurance policies and other financial products through a multilevel marketing organization that ALW developed in the late 1970s. Primerica’s multilevel marketing organization resembles that of Herbalife in many respects and differs in some respects.
    • I think the biggest difference between Herbalife and Primerica is that the FTC has been barred by statute for more than three decades from doing anything about insurance companies. Indeed, the FTC is barred by statute from even investigating insurance companies without a formal request from a Congressional committee. Here is the current language of the statute:
      • The Commission may exercise such authority [to conduct studies and prepare reports relating to the business of insurance] only upon receiving a request which is agreed to by a majority of the members of the Committee on Commerce, Science, and Transportation of the Senate or the Committee on Energy and Commerce of the House of Representatives. The authority to conduct any such study shall expire at the end of the Congress during which the request for such study was made. [15 U.S. Code, Section 46-Additional powers of Commission.]
    • In addition, the Consumer Financial Protection Bureau, which was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, is barred from doing anything about insurance companies. See my post No. 137 dated January 4, 2016.
    • On the other hand, another section of the Dodd-Frank Act established the Financial Stability Oversight Council (FSOC). That section does not bar the FSOC from investigating insurance companies. Indeed, it provides for the FSOC to investigate “nonbank insurance companies.” The FSOC has designated three major U.S. insurance organizations-American International Group, MetLife, and Prudential Financial-as “nonbank systemically important financial institutions.” MetLife filed a lawsuit against the FSOC, a federal judge rescinded the designation, and the FSOC’s appeal is ongoing. See my post No. 170 dated July 15, 2016.
    • Thus it appears that state insurance regulators are the only source of protection for insurance consumers against potential wrongdoing through multilevel marketing organizations in the insurance business. It remains to be seen whether the recent developments involving the FTC and Herbalife will have any influence on state insurance regulators. As far as the past is concerned, with a few minor exceptions, I am not aware of state insurance regulators showing significant concern about the potential anti-consumer aspects of the multilevel marketing organization that Primerica and its predecessor have used for many years.

LEAP – Lifetime Economic Acceleration Process

  • In September 2012, Leap Systems, LLC became an affiliate of Penn Mutual. LEAP is a leading provider innovative financial systems for financial professionals throughout the United States and Canada.

2012 0310 – ThinkAdvisor – Leap Systems, LLC, Announces Organizational Changes – [link]

  • 2017 1112 – Economic Warrior / Barry James Dyke – Robert Castiglione, Founder of The Leap System  —  [BonkNote]  —  [VIDEO-YouTube-41:52]
  • 2020 1022 – Economic Warrior / James Dyke – Bob Castiglione – [VIDEO-YouTube-34:57]
  • 2024 0313 – Economic Acceleration – Bob Castiglione Delivery on Utility of the Death Benefit – [VIDEO-YouTube-01:13]

1980s

  • 1987 – MDRT Proceedings – MDRT 1987 Bob Castiglione – Life Insurance The Heart of Financial Consulting – [VIDEO-YouTube-54:15 – U]

1990s

2000s

  • 2004 – MDRT Proceedings – MDRT 2004 Bob Castiglione Creating A Wow Experience with Life Insurance  —  6p  —  [VIDEO-YouTube-53:30 – U]
  • 2005 – Book – Leap: Lifetime Economic Acceleration Process, by Robert Castiglione

2010s

  • 2012 0310 – ThinkAdvisor – Leap Systems, LLC, Announces Organizational Changes – [link]
  • 2013 05 –  LMR – My History with IBC, by Robert P. Murphy, PhD, Lara-Murphy Report – 17p
  • 2014 – InsuranceNewsNet – Leap Systems, LLC, Announces Organizational Changes – [link]
    • Leap Systems, LLC, an affiliate of The Penn Mutual Life Insurance Company, today announced organizational changes that will continue to position LEAP as a company committed to providing innovative insurance and financial systems for financial professionals and consumers throughout the United States and Canada.
    • Ande Frazier, CLU, LUTCF, has been named President & Chief Marketing Officer. She brings more than 20 years of LEAP marketing and training experience to her new role.
  • 2014 – LMR – Defending IBC from Bob Castiglione by Robert P. Murphy – [link]
  • 2013 05 –  LMR – My History with IBC, by Robert P. Murphy, PhD, Lara-Murphy Report – 17p
  • 2011 0306 – What happened to the LEAP thread – Post by mephistophles » Sun Mar 06, 2011 11:58 pm – bogleheads.org/forum/viewtopic.php?t=70217
    • I responded to Robert Castiglione, founder of the LEAP system when he stated that LEAP had nothing to do with life insurance.
    • I posted some comments and a link showing specifically that Mr. Castiglione presented his LEAP system to the Million Dollar Round Table annual meeting of top insurance agents in the world a few years back.
    • That thread seems to have disappeared. It ceased to exist. It vanished. I can only assume some mechanical glitch deleted that thread. If I broke a boglehead posting rule, I was not aware of it. No moderator has contacted me.
    • Bogleheads need to know that the LEAP system is used by life insurance agents to sell large amounts of whole life insurance.
    • So, what happened?
    • by Mel Lindauer » Mon Mar 07, 2011 9:45 pm
      • When a thread disappears, you should know that it was because of a moderator action. Openly questioning Moderator actions is a violation of forum policy. In the future, use the PM system to question things like this.     
      • That thread appeared to be spam or a commercial for the program. The thread was started by a new first-time poster and then the CEO of that program just happened to show up and try to tell forum members about the program.
      • It was considered to be spam/commercial so it was removed. This thread is now locked.
  • 2016 1028 – insurance-forums.com/community/threads/leap-and-cheaper-alternatives.85108/
    • p1 – TomZack – For those who are familiar with the (expensive) LEAP software program….. Are there mini versions or less expensive or alternative options in the marketplace? The larger mutual Life companies have LEAP or something like it for their offices and agents.
    • p2 – PrivClientSG – Well, since this was revitalized just a few months ago, I will chime in, LOL. While I’ve spent a fortune on software, I can’t speak to “financial planning” or that marketplace, because my experience with that software is limited, and I am not in that marketplace.
      • Bob Castiglione, the founder of LEAP, whether you like him or not, was really the first to bring together and formalize the life insurance concepts that LEAP was all about. The living benefits of life insurance, the death benefit as an asset, a capitalized asset, etc. — all of it was inside of LEAP. Was it a system? Or was it a “sales process” — I’ll let you decide and everyone else to argue, LOL. Sure, there were others who spoke about these concepts, but Bob really formalized it and brought it into a system. While I’ve seen software systems that portrayed these concepts, most of them were either market-specific (like InsMark in the estate planning marketplace for example), however, LEAP was very early on and covered all of it for the masses. If you read the Economics of Life Insurance, by Solomon Huebner, which was updated and re-published by Bob Castiglione, you can see all of these concepts. I took LEAP — in the mid to late 90’s, kept my license active, did all the updates, symposiums, etc., but I did not adopt it as it was meant to. I adapted it to my marketplace and used many of the concepts. I also bought the software when it came out and was licensed with it until about 7 years ago or so.
      • In the end, I can’t speak to alternatives as I don’t directly and intentionally look at them. However, I do think there is some great software out there in certain marketplaces, with certain uses, applicability, etc.
    • p2- Lloyds of Lubbock – Try Circle of Wealth. It is like leap light.
    • p2 – DHK – Two completely different ‘ultimate’ planning objectives.
      • LEAP uses the “permission slip spend-down” concept (minimum pay permanent policy to offset other assets) while Circle of Wealth advocates more of the max-funded cash value life insurance policy approach.
      • I went into more detail with Tom Love (who learned from Don Blanton and evolved from COW) and John Ocweija (who was a LEAP trainer and now a co-founder of Wealth Building Cornerstones):
        • [Bonk: 2022 0113 – The Financial Advocacy Podcast / David Kinder – PLIAD Group Expert Series: Selling Systems and Learning the Economics of Life Insurance Contracts – [VIDEO-YouTube-01:52:46]]
        • [Bonk: Wealth Building Cornerstones – wbcornerstones.com/]
          • Wade Pfau – wbcornerstones.com/dr-pfau/  –  We are extremely excited to announce that Dr. Wade Pfau CFA, RICP® has joined Wealth Building Cornerstones™ as our Chief Research Fellow. Dr. Pfau has his BA and BS from the University of Iowa, MA and PhD from Princeton University.
          • Dr. Pfau is a Professor of Retirement Income and the Program Director for the RICP® designation at The American College®.
          • Dr. Pfau has written two white papers on WBC and the strategies within. He has also recently released his book, “Safety-First Retirement Planning”, that references WBC. No other system has this level of academic backing and support.
  • 2008 – Book – Killing Sacred Cows, by Garrett Gunderson
    • p30 - Robert Castiglione, the founder of the LEAP (Lifetime Economic Acceleration Process) system of financial engineering, teaches that financial institutions operate under four rules:
      • 1. Financial institutions want our money.
      • 2. They want it on a regular, systematic basis (preferably through automatic withdrawal). 
      • 3. Once they have our money, they want to hold on to it for as long as possible (hence early withdrawal restrictions). 
      • 4. If they have to give it back, they want to give back as little as possible.
      • Does this make the business practices of financial institutions unethical? No. The point isn’t to criticize them for operating this way, but to clarify that their operations are based on their own interests-which often do not coincide with ours. The fallacies of the accumulation theory are exposed when we understand what the financial institutions do with the money that we give them-
    • Self-insurance really means no insurance.
  • In the Matter of Department of Enforcement vs. Daniel D. Manoff, Poolesville, Maryland 

Investment Oriented Life Insurance Products

  • 2011 – LR – Combating the Teleological Drift of Life Insurance Solvency Regulation: The Case for a Meta-Risk Management Approach to Principles-Based Reserving, by Robert Weber – 82p
    • 2. The Product Shift: From Traditional Whole Life to Investment-Oriented Capital Accumulation Products & Annuities  ….. 68
      • (a) Life Insurance Products ….. 69
  • 1988 0315 – GOV (House) – Investment Uses of Life Insurance
    • [PDF-257p-GooglePlay,  VIDEO-?] -> Not on govinfo.gov
    • ACLI – Richard S.Schweiker
    • Andrew D. Pike
    • DOTT – Dennis E. Ross, Deputy Assistant Secretary for Tax Policy, U.S. Department of the Treasury
    • GAO – Testimony – Taxation of Single Premium Life Insurance – 15p
    • House – Committee on Ways and Means – Subcommittee on Select Revenue Measures 
  • 1988 0325 – GOV (Senate) – Tax Treatment of Single-Premium Life Insurance, (CSPAN) Single Premium Life Insurance, Max Baucus, (D-MT)  —  [BonkNote]
    • 1988 0315 – GAO – Testimony – Taxation of Single Premium Life Insurance – 15p
  • 1989 Dec / Jan – AICPA – The Planner – 9p
    • Investment-Oriented Life Insurance Products
    • To discourage the use of life insurance as a tax shelter, the Act provides for the taxation of certain distributions from single-premium and other investment-oriented life insurance contracts.
    • Policies subject to the new rules are those meeting the definition of modified endowment contracts in new I.R.C. Section 7702A or policies received in exchange for modified endowment contracts. Modified endowment contracts are policies entered into after June 20, 1988, that do not meet the 7-pay test. Under that test, the accumulated amount paid under the contract at any time during the first seven years must be no more than the sum of net level premiums that would be paid if the contract provided for paid-up future benefits after payment of seven level annual premiums
  • 1990 01 – GAO – Tax Treatment of Life Insurance and Annuity Accrued Interest – Report to the Chairman, Committee of Finance, U.S. Senate, and the Chairman, Committee on Ways and Means, House of Representatives, Government Accountability Office – 56p 
  • 1994 – AICPA – core.ac.uk/download/pdf/288030654.pdf
  • 2008 – Book – Handbook of Finance, by Frank J. Jones
    • Investment-Oriented Life Insurance – Volume I. Financial Markets and Instruments – 6. Investment Companies, ETFs, and Life Insurance Products
  • 2010 – LIMRA / Milliman – Emerging Risks in the Marketing and Distribution of Life Insurance and Annuities – 44p
    • (p20) – For some consumers, a basic whole life insurance product looks pretty good right now, compared with other more investment-oriented life insurance products. LIMRA’s sales tracking studies show that whole life and term insurance fared much better during the crisis than universal and variable life products (See Figure 6.2). A focus on traditional guaranteed products could be an effective strategy in the current environment.
  • 2015 01 – OCC – Retail Nondeposit Investment Products, Version 1.0, Office of the Comptroller – 171p
    • (p38) – A growing trend in the brokerage industry involves the “dual hatting” of registered representatives as RIA employees. These sales representatives provide investment advisory services to retail clients in tandem with brokerage services.
    • A bank’s arrangement for the provision of RNDIP sales activities may also engage insurance agents for the offering of fixed rate annuities and investment oriented life insurance products. A bank’s initial selection and ongoing due diligence processes should comprehensively cover all the affiliated and unaffiliated third parties engaged in the RNDIP sales program.
  • joinwai.com/seminar.html
    • SEMINAR PRESENTATION SUPPORT FROM DAVID MACCHIA ONE OF THE INDUSTRY’S TOP PUBLIC SPEAKERS- AND LEADING EXPERT IN RETIREMENT INCOME- WILL HELP YOU MAXIMIZE THE SUCCESS OF YOUR EDUCATIONAL EVENTS
    • Paine Webber – The Alternative Plan: How to Create Tax-advantaged Retirement Income.
      • The Paine Webber – David Macchia Retirement Income Seminar School

Kentucky Central Life

19 Jan 1986, Sun The Roanoke Times (Roanoke, Virginia) Newspapers.com

01 May 1988, Sun The Daily Herald (Provo, Utah) Newspapers.com

  • 1996 0430 – Los Angeles Times – Pressure Mounts to Curb Insurance Industry Guard, By Scot J. Paltrow – [link]
    • Hunter and others say the Kentucky Central episode stands as a textbook example of the risk of leaving regulation to a company’s home state.
    • Based in Lexington, Kentucky Central was among the nation’s biggest sellers of universal life policies.
    • In the late 1980s, it began investing heavily in questionable real estate deals. As the value of those investments dropped, Kentucky Central’s reserves for paying customers’ claims dwindled.
    • As the problems grew, Kentucky’s insurance department did nothing to stop the company from selling new policies.
    • The Louisville Courier-Journal unearthed evidence that when Kentucky Central started to get into trouble, it went to great lengths to court state officials. Court records show that weeks before Gov. Wallace Wilkinson’s inauguration in 1988, Kentucky Central paid $12.6 million to buy a money-losing hotel from him in the state capital. The price included a $120,000-a-year “consulting fee” payable throughout his term in office.
    • (The company’s liquidator is suing Wilkinson to try to get the money back. A Wilkinson spokesman said the governor never tried to influence state insurance regulators.)
    • In 1992, the NAIC’s newly beefed-up computer system began kicking out warnings. As Kentucky Central’s problems worsened, one state after another, including California, suspended the company’s license to sell policies.
    • Finally, in late May 1993, the Kentucky Insurance Department banned the company from writing new policies and put it into liquidation.
    • A lawyer for Kentucky Central’s liquidator said the company then had on hand $141 million less than it needed to cover potential claims. The liquidator estimated, however, that once all assets are disposed of, Kentucky Central’s customers will have suffered no permanent loss.

Federal Crime Insurance Program

1970s

  • 1977 – govinfo.gov/content/pkg/FR-1977-10-06/pdf/FR-1977-10-06.pdf
    • FEDERAL CRIME INSURANCE PROGRAM
      • HUD/FIA proposes a method of compensating property and life insurance agents and brokers with a one time finder’s fee and provide for the designation of certain nonprofit community corporations and organizations as eligible for a finder’s fee; comments by 11-4-77………. 54432

1980s

  • 1980 – Federal Crime Insurance Program – Questions and Answers  —  [link] — 7p
    • A question and answer format is used to provide information about the Federal Crime Insurance Program, through which homeowners, tenants, and business owners can obtain federally subsidized crime insurance in areas lacking available or affordable insurance through the voluntary market.
    • Abstract -Federal Crime Insurance insures against financial losses from burglary and robbery. The program began in 1971 and now makes crime insurance available in 25 States, the District of Columbia, Puerto Rico, and the Virgin Islands. More than 85,000 policies are in force.
  • 1982 – GAO – The Federal Crime Insurance Program: An Overview – CED-82-68  —  [link]  —  22p
  • 1983 01 – FEMA – Federal Crime Insurance Program: Agent Manual – [PDF-214p-GooglePlay]
  • 1989 0628 – GOV (House) – Federal Crime Insurance Program
    • [PDF-441p-GooglePlay]
    • House – Committee on Banking, Finance, and Urban Affairs – Subcommittee on Policy Research and Insurance