Trade Practices

  • Equal to the need for financially sound insurance products is the need for socially responsive insurance companies.
    • Consumers are not well served by a company that meets statutory reserve requirements but engages in unacceptable or morally-barren trade practices any more than they are served by companies that offer them pie-in-the-sky policies backed by assets worth no more than the paper on which they are written.
    • Therefore, the issues brought to the NAIC should not be so narrow as to overlook the relationship of product service and product soundness.
    • Both elements need to be balanced as decisions are made in a changing industry.

—  Lymcon L. Olson, Jr., NAIC Presidential Address

1983-1, NAIC Proc.

Mutual – Index

LIRP – Life Insurance Retirement Plan – Company Documents

2000s

  • 2008 – John Hancock – Client Profile: Life Insurance Retirement Plan – 2p 

2010s

2020s

  • 2021 – Wells Fargo – Insurance Strategic Relationship Handbook – 83p
    • p32 – Common items generally flagged for correction
    • Do not refer to “plans” or “programs” when only life insurance is presented. For example, make it clear that life insurance is not a retirement plan or “LIRP” but it may provide funding for retirement needs as a secondary benefit.
    • The concept of using life insurance to supplement retirement income is approved, however referring to this concept as Life Insurance Retirement Plan, Life Insurance Retirement Planning and/or using the “LIRP” acronym is prohibited.
    • Do not refer to life insurance as an investment or savings plan.
    • Material discussing the use of life insurance for estate or tax planning purposes should include a tax and legal notice. 
  • 2022 – Prudential – https://www.prudential.com/content/dam/us/sites/financial-education/how-can-life-insurance-help-manage-taxes-in-retirement_PDF/1022550-00005-00%20The%20Tax%20Advantages%20of%20Life%20Insurance.pdf
  • 2023 – newyorklife.com/articles/life-insurance-retirement-plan
    • Which life insurance policy is best for retirement planning?
      • If you plan on using life insurance to help fund your retirement, it’s important to purchase a policy that offers significant cash value appreciation potential as a feature.
      • That means you will want to consider three types of coverage: whole life, and variable universal life.2 
  • 2023 1214 – Lincoln Financial – Does America have a math problem? – [link]
    • Steve Sabol is the Sales Vice President for Lincoln Financial … Lincoln DesignItSM/WinFlex sales concepts, including the LIRP/SRP concept.

 

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.

Company Computer Systems

  • 1992 0929 – Montreal Life Insurance company destroyed by computer errors?, by Peter Deutsch – The Risks Digest Volume 13: Issue 21 – p238-239 – 952p

Profit

  • 1983 – SOA – Profit Standards and Analysis of Earnings for Insurance Companies, Society of Actuaries – 24p

Agents vs. Companies

1980s

  • 1985 – LC – Glassman v. Metropolitan Life Ins. Co. –  616 F. Supp. 145 – Dist. Court, ND Illinois, 1985 – [Google Scholar link]
    • … Glassman (Glassman) brought this libel action against his former employer, Metropolitan Life Insurance Company (Metropolitan … We wish to inform you that Mr. Ray Glassman no longer represents Metropolitan …

1990s

  • 1996 – LC – Metropolitan Life Insurance Company v. Haney, Charles G.
    • 14-96-01096-CV
    • Date Filed: 09/06/1996
    • https://search.txcourts.gov/Case.aspx?cn=14-96-01096-CV&coa=coa14
      • 08/11/2014 Case file was destroyed per retention schedule
    • ACLI – AMERICAN COUNCIL OF LIFE INS. – Appellant – Jane Webre, Steve McConnico, Phillip E. Stano
    • 2000 – LR – Deceptive Trade Practices – Consumer Protection Act, by A. Michael Ferrill and Leslie Sara Hyman – 35p
      • In Metropolitan Life Insurance Co. v. Haney,8 a life insurance agent brought DTPA claims against MetLife complaining of inaccurate policy illustrations generated by computer software that MetLife sold to its agents.
      • The Texas Supreme Court revisited this issue in Crown Life Insurance Co. v. Casteel,52 a case involving claims by insurance policyholders against a life insurer and agent and a cross-claim by the agent against the insurer. 
  • 1997 – LC – Casteel v. Crown Life Ins. Co. – 3 SW 3d 582 – Tex: Court of Appeals, 3rd Dist., 1997  —  [BonkNote]
    • This appeal arises out of a lawsuit involving multiple parties with claims and cross claims concerning the sale of life insurance policies to Randall and Sandra Ferguson. Specifically, the issues involved in this appeal pertain to a dispute between appellant William E. Casteel, an insurance agent …
    • 2000 – LC – Crown Life Ins. Co. v. Casteel – 22 SW 3d 378 – Tex: Supreme Court, 2000 – [Google Scholar link]
      • William E. Casteel sold insurance policies as an independent agent of Crown Life Insurance Company.
      • One of the policies sold by Casteel led to a lawsuit by policyholders against Casteel and Crown.
      • In that lawsuit, Casteel filed a cross-claim against Crown. In this appeal from that …

2010s

  • 2xxx– LC – Fairbanks v. Farmers New World Life  —  [BonkNote]
  • 2010 – LC – Maloof v. John HancockLife Ins. Co. –  60 So. 3d 263 – Alabama Supreme Court Opinion  —  [BonkNote]  —  39p
    • Parker A. Glasgow – Agent, and also Policyowner
      • (6-7p) – On April 16, 2008, John Hancock moved the trial court to stay all proceedings pending a ruling from the United States District Court for the Southern District of California on whether the Maloofs’ action was barred by the settlement of a class action overseen by that court in 1998 in which allegedly deceptive sales practices used by Manulife between 1982 and 1993 were challenged;
        • Glasgow subsequently joined in that motion.

Principal – Agent

  • Crown Life v Casteel
  • 2023 – FSRA – Consultation

1968 – LC – Kentucky Central Life Ins. Co. v. Combs, Ky., 432 S.W.2d 415 – [link-CaseText]

Company Conversions

  • 1998 – SOA – Mutual Insurance Holding Company Conversions: Lessons Learned, Society of Actuaries – 20p

Insolvent

  • 1977 0525 – NP – The Washington Post – How an Insolvent Firm Keeps Selling Insurance, By John F. Berry – [link]
  • 1992 – LR – The Effects of the Insurance Industry Insolvency on Pensioners’ Incomes: A Plan for Federal Insurance, by Lee Anne LeBlanc – 33p
  • 1998 – LR – The Law and Finance of Bank and Insurance Insolvency Regulation, by David A. Skeel Jr – 59p
  • 1996-1, NAIC Proceedings – INSOLVENCY (EX5) SUBCOMMITTEE – March 27, 1996 
    • 6. Received the report of the Federal Issues Working Group, which discussed in executive session issues pertaining to claims of the federal government in insurer insolvencies and Section 304 of the U.S. Bankruptcy Code.
    • 7. Received the report of the Model Act Working Group, which heard a report from a technical resource group regarding proposed amendments to the Insurers Rehabilitation and Liquidation Model Act concerning the treatment of derivative instruments and swap agreements in insurer insolvencies, and received comments from the ACLI.
    • 8. Heard a report on the status of Fidelity Mutual Life Insurance Company, in Rehabilitation.
    • 9. Heard a suggestion that the subcommittee meet with the Financial Condition (EX4) Subcommittee concerning the status of claims for reinsurance recoverables associated with intercompany pooling arrangements.
  • (p650) – Mr. TELFER. In 1929 the Modern Woodmen were actuarially insolvent – don’t ask me what that is, just accept it; it is a long story so they proceeded to rerate their policies, and in doing that they made a contract with a firm known as Frank Pearson & Co. of Chicago.
    • Well, Pearson was a transfer man-a man who transfers an old policy into a new one.
    • Your Mr. Sullivan could tell you a lot about that. 

1936 – GOV (House) – Investigation of Real Estate Bondholders’ Reorganizations – Part 19 – Adolph J. Sabath (D-IL)  —  [BonkNote]