FTC – Congress – Life Insurance

  • 1986 0121 0122 – GOV (House) – The Liability InsuranceCrisis – [PDF-553p-GoogIePIay VIDEO-?]
    • NICO – J. Robert Hunter, president, National Insurance Consumer Organization – p279-299
    • WHAT SHOULD CONGRESS DO?
    • First, it should subject the insurance industry to the anti-trust laws, thus preventing insurers from acting in concert to raise prices.
      • Since 1944, the McCarran-Ferguson Act has allowed insurance companies to fix prices  while price-fixing in other industries is punishable by three years in jail.
      • We specifically propose a two- year sunset provision during which time the insurers, the states and the federal government can prepare for the change.
    • Second, it should create a federal office of insurance to monitor the industry and establish standards for state regulators to follow
      • . Although insurance is a national, $310 billion business, accounting for 12% of our gross national product — more than any other item except food and housing — only the states regulate the insurance industry.
      • Because state insurance commissions are often under-staffed (half the states have no actuaries to analyze rate filings) and have a “revolving door” relationship with the industry (state insurance commissioners typically come from and return to the industry), state regulation has not always protected the public.
    • Third, Congress should repeal the insurance industry’s exemption from Federal Trade Commission jurisdiction.
      • In 1979, after the FTC published a study critical of the life insurance industry , Congress prohibited the FTC from ever again studying — let alone prosecuting — any sector of the industry.
      • There is no principled justification for this exemption .
  • 1987 0421, 0428, and 0429 – GOV (House) – Current State of the Liability Insurance Crisis
    • [PDF- 313p-GooglePlay, VIDEO-?]
    • Testimony – FTC – Daniel Oliver, Chairman of the FTC – p242-260
    • Letter – FTC to GOV – p290-291
      • Chairman La Falce has requested information on the circumstances that led to enactment of the 1980 amendment to the Federal Trade Commission Act that prohibits the Commission from studying the business of insurance .
    • (p288) – Chairman LAFALCE. All right, fine. I would also like you to supply for the record, a statement as to why the FTC believes it lost its authority in 1980, that is, what was the FTC doing in that era?
      • Mr. OLIVER. I am told that it resulted from a study that the Commission did on how good an investment life insurance was, the staff study.
        • I understand that it was a staff study that concluded that buying life insurance was not a good investment.
      • Chairman LAFALCE. The insurance industry did not like that, and therefore they got enough Members of Congress to support their position.
      • Mr. OLIVER. I think that is correct.
    • House – Committee on Small Business

1979 1011 and 1022 – GOV (House) – Small Business Problems with Insurance – Part 1 – John LaFalce (D-NY)

  • 1979 1011 and 1022 – GOV (House) – Small Business Problems with Insurance – Part 1,  John LaFalce (D-NY)  —  [BonkNote]
    • [PDF-337-GooglePlay]
      • FTC Life Insurance Survey
      • Economatic
    • House – Committee on Small Business – Subcommittee on General Oversight and Minority Enterprise
  • John LaFalce (D-NY) – During the course of our product liability travails, we ascertained that there were very few people within the Federal Government with an understanding of the insurance industry. This lack of knowledgeability is illustrated by an article appearing this past Monday in the Wall Street Journal which recounted how the Department of Justice lost a taxation case involving a life insurance company in the U.S. Supreme Court as a result of its misunderstanding of the functioning of life insurance companies.
    • A staff memo, which referred to the decision as ” demonstrably incorrect” stated:
      • “It appears that for many years the workings of the life insurance business have been misunderstood by those at the [Internal Revenue Service and Justice Department] associated with the question.”
    • This past Tuesday, the Government Accounting Office released a survey it undertook of the functionings of the various State insurance regulatory bodies. That study raised serious questions as to the efficacy of State regulation as it is currently conducted. And I note parenthetically that the GAO report will be the subject of a hearing before this subcommittee on October 22. 
  • Given the veil of ignorance shrouding the business of insurance, this subcommittee believes that it is imperative to ascertain whether small businesses are being treated fairly in the insurance marketplace. To this end, we are attempting at this hearing to ascertain the types of problems that small businesses may be encountering.
  • We have with us this morning several witnesses who, hopefully, will be able to provide us some indication as to where the subcommittee should direct its future efforts.

1979 0918, 19, 27, 28 and 10 04, 05,10 – GOV (Senate) – Oversight of the Federal Trade Commission – Wendell Ford (D-KY)

  • 1979 0918, 19, 27, 28 and 10 04, 05,10 – GOV (Senate) – Oversight of the Federal Trade Commission, Wendell H. Ford (D-KY)  —  [BonkNote]
    • [PDF-853p-GooglePlay]
    • Magnuson-Moss Act
    • Oversight to Examine the Enforcement and Administrative Authority of the FTC to Regulate Unfair and Deceptive Trade Practices
    • Senate – Committee on Commerce, Science, And Transportation – Subcommittee for Consumers

2015 0428 – GOV (Senate) – The State of the Insurance Industry and Insurance Regulation – Richard Shelby (R-AL)

  • The State of the Insurance Industry and Insurance Regulation, Richard Shelby (R-AL)  —  [BonkNote]
    • [PDF-56p, VIDEO-Senate] – <mp3, mp4> – T
    • Woodall, McCarty, McRaith, Mark Van Der Weide
    • NAIC – Kevin M. McCarty, Commissioner Florida Office of Insurance Regulation, On Behalf of the National Association of Insurance
      • The fundamental tenet of our U.S. system is to protect policyholders by ensuring the solvency of the insurer and its ability to pay insurance claims. Written Testimony – (p2) – 6p
    • Examining The Unique Aspects Of The Insurance Industry, The Development And Implications Of Domestic And International Capital Standards, And Evaluate The Current State Of Insurance Regulation In The United States And Abroad
    • Senate – Committee on Banking, Housing, and Urban Affairs
  • Richard Shelby (R-AL) – Chair
    • As a liability-driven business, insurance often has long-term cash flow patterns compared to shorter-term activities at banks.
      •  Consequently, current law fails to adequately account for the business model and risk profile of insurance companies, and that should concern us all.
  • Response To Written Questions of Senator Shelby from Richard Bouhan (Executive Director, National Association of Professional Surplus Lines Offices)
  •  (p355) – Q.1. Will you please explain why you believe Federal legislation is needed to streamline the regulation of surplus lines insurance? 
  • Q.2. Why should we not leave it to the NAIC to accomplish this task?
  • A.2. The simple answer is that the NAIC cannot solve the problem.
    • It neither has the history nor is it, as a trade association representing state insurance regulators, structured to do so.
    • Moreover, the NAIC has no regulatory or enforcement authority that would allow it to accomplish this task.

1991 0729 – GOV (House) – Regulation of Insurance Companies and the Role of The National Association of Insurance Commissioners – NAIC – Ben Erdreich (D-AL)

  • 1991 0729 – GOV (House) – Regulation of Insurance Companies and the Role of The National Association of Insurance Commissioners, Ben Erdreich (D-AL)  —  [BonkNote]
    • [PDF-286p-GooglePlay], VIDEO-?] ->Not on govinfo.gov – R
    • GAO – 1991 0729 – GAO – Insurance Regulation: Assessment of the National Association of Insurance Commissioners, Statement of Richard L. Fogel, Assistant Comptroller General General Government Programs, Before the Subcommittee on Policy Research and Insurance Committee on Banking, Finance, and Urban Affairs, U.S. House of Representatives – 57p
    • ⇒ NAIC – Statement of Mike Weaver, Commissioner, State of Alabama – 8p
    • House – Committee on Banking, Finance and Urban Affairs – Subcommittee on Policy Research and Insurance
  • (p10) – Statement of Mike Weaver (Commissioner, State of Alabama) – A very recent example of that would be the Mutual Benefit situation where over $1 billion was withdrawn over a 2-week period of time. There are not many insurance companies nationwide that can withstand that thrust.
    • The public has to have confidence in what is going on out there in all financial institutions, insurance being one of the major ones. 
  • (p13) – NAIC – William McCartney, Director of Insurance, State of Nebraska and Vice President, National Association of Insurance Commissioners 
    • We are seeing a real crisis in confidence:
    • That, in my mind, is probably the worst thing that could happen.
    • There is not a company in the country that can stand runs that Commissioner Weaver was talking about, where people ask for $1 billion in policy loans and surrenders in a 2-week period.  

DOL – Fiduciary – Government Hearings

  • 2016 – Congresswoman Ann Wagner (R-MO) discusses how the Administration’s “Fiduciary Rule” is really just Obamacare for Americans’ savings accounts. – youtube.com/watch?v=-_NeKxGmvpw
  • 2011 0211 – GOV (House) – Emerging trends at the National Labor Relations Board, Phil Roe (R-TN)
    • [PDF-xp-GooglePlay, VIDEO-?]
    • House – Committee on Education and the Workforce – Subcommittee on Health, Employment, Labor and Pensions
    • 3 See NLRB v. Insur. Agents’ Int’l Union, 361 U.S. 477, 489 (1960), where the Supreme Court referred to the bargaining contemplated by the Act, and observed that the parties “proceed from contrary and to an extent antagonistic viewpoints and concepts of self-interest. * * * The presence of economic weapons in reserve, and their actual exercise on occasion by the parties, is part and parcel of the system that the Wagner and Taft-Hartley Acts have recognized.”
  • 2011 0712 – GOV (Senate) – Enhanced Investor Protection After The Financial Crisis, Tim Johnson, (D-SD)  —  [BonkNote]
    • [PDF-132, VIDEO-Senate Page]
    • banking.senate.gov/hearings/enhanced-investor-protection-after-the-financial-crisis
    • Surveying The Investor Protection Provisions Contained In The Dodd-Frank Wall Street Reform And Consumer Protection Act One Year After Its Implementation
    • Senate – Banking, Housing, and Urban Affairs
      • 2011 01 – GAO – Consumer Finance: Regulatory Coverage Generally Exists for Financial Planners, but Consumer Protection Issues Remain, Government Accountability Office – Full Report – 51p
    • ⇒ 02:05:00 – David Massey – NASAA – North American Securities Administrators Association – Best Interest – Conflicts of Interest – Holding self as a Fiduciary. – 11p
    • 02:06:00 – DOL – Fiduciary Rule – Lack of Coordination – SEC – 
  • 2011 0726 – GOV (House) – Redefining ‘Fiduciary: Assessing The Impact Of The Labor Department’s Proposal On Workers And Retirees, David P. Roe (R-TN)
    • [PDF-150p. 
    • House – Committee on Education and the Workforce – Subcommittee on Health, Employment, Labor and Pensions
  • 2013 1218 – Testimony – ACLI – GOV (Senate) – The Role of Social Security, Defined Benefits, and Private Retirement Accounts in the Face of the Retirement Crisis – 63p
  • 2013 0131 – GOV (Senate) – CSPAN – Retirement Savings
    • [PDF-p, VIDEO-CSPAN]
    • Senate – Committee on Health, Education, Labor, and Pensions 
  • 2014 0916 – GOV (Senate)
    • [PDF-xp, VIDEO-CSPAN]
    • Senate – Senate Finance Committee
  • 2015 0617 – GOV (House) – Restricting Access To Financial Advice: Evaluating The Costs And Consequences For Working Families And Retirees, David P. Roe (R-TN)
  • 2015 0721 – GOV (Senate) – Restricting Advice and Education: DOC’s Unworkable Investment Proposal for American Families and Retirees, Johnny Isakson (R-GA)
    • (PDF-64p,  VIDEO-CSPAN-01:43:18]
    • Litan. Robert, Economist and Attorney
    • Schneider, Peter, President, Primerica Inc.,
    • Miller, Darlene, President and CEO. PERMAC Industries
    • Puritz, Scott, Managing Director, Rebalance IRA,
    • Senate – Committee on Health, Education, Labor, And Pensions
      – Subcommittee on Employment and Workplace Safety
  • 2015 0930 – GOV (House) – DEPARTMENT OF LABOR’S PROPOSED FIDUCIARY RULE, Peter Roskam (R-IL) 
  • 2019 0514 – GOV (Senate) – CSPAN – Senate Hearing on Retirement and Financial Security

 

  • 2024 0215 – GOV (House) – Protecting American Savers and Retirees from DOL’s Regulatory Overreach, Bob Good (R-VA)
    • [PDF-, VIDEO-YouTube-02:06:21]
    • edworkforce.house.gov/calendar/eventsingle.aspx?EventID=410108
    • Opening statement:
    • Witnesses:
      • NAIC – Doug Ommen, Insurance Commissioner, Iowa Insurance Division – 6p
      • Groom Law Group – Thomas Roberts, Principal, Groom Law Group – 6p
      • PIABA –  Joseph C. Peiffer, President, Public Investors Advocate Bar Association  —  [BonkNote]  —  30p
      • IRI – Jason Berkowitz, Chief Legal and Regulatory Affairs Officer, Insured Retirement Institute – 197p
    • 25 – NAIC – Doug Ommen, Insurance Commissioner, Iowa Insurance Division
    • Subcommittees on Health, Employment, Labor, and Pensions; Higher Education and Workforce Development

1974 0710 – GOV (Senate) – Pyramid Sales, Frank E. Moss (D-UT)

  • (p1) – Frank E. Moss (D-UT) – Today we will look into the strange and disturbing world of the fast buck pyramid sales scheme.
    • Untold hundreds of small investors have been bilked out of hard earned savings by the fast talking operators of these get rich quick schemes. 
  • (p9) – Securities & Exchange Commission v. Glenn W. Turner Enterprises Inc.
  • (p9) – The non-disclosure charged Is that it Is mathematically impossible for each participant to do so. See Blachly v United States .380F.2d 665 (5th Clr.1967).
  • (p11) – Third. lines 12 through 16 of the amendment are objectionable for vagueness. With the acceptance of this amended language, counsel for the United States would be forced to ask a jury in a criminal prosecution to find beyond a reasonable doubt that there is a “reasonable probability” that compensation will be derived “primarily” from recruitment of others. 
  • (p11) – Fourth, the last four lines of the proposed amendment on page 12 of the IFA Statement fail to distinguish between sales to consumers and sales to other participants and, therefore, it is objectionable for the reasons mentioned earlier.
  • (p11) – endless chains
  • (p15) – 
  • (p16) – Senator MONDALE (D-MN)  – However, their efforts have frequently been frustrated by neighboring States with no law concerning these organizations or no enforcement efforts. Pyramiders simply flee to States with weak or nonexistent legislation.
    • The bill imposes criminal and civil penalties on those fraudulent pyramid sales operators who prey on the public with unfounded presentations of future earnings through endless chain promotions.
    • Pyramid sales schemes are defined by  S. 1939 as including any plan or operation for the sale or distribution of goods, services, or other property which contains any provision for increasing participation in the plan through a chain process.
    • This chain process is further defined to include payment of considerable compensation for introducing one or more additional people into participation in the plan each of whom receives the same or  similar right or opportunity to receive compensation when a person introduced by the participant introduces one or more additional persons into participation in the plan.
    • This definitional language isolates the fraudulent pyramid sales operations without affecting the hundreds of legitimate companies which do business using commission arrangements or franchise organization in which the primary aim is sales to the consuming public rather recruitment of additional persons into an endless chain.
  • (p17) – Senator Moss (D-UT) – I wonder if I can interrupt. Do you know of any organized opposition to the basic thrust of this bill? There may he questions on the definition or something like that.
    • Senator MONDALE (D-MN) –  I know of none. More than that, there is a very strong sense of urgency by all concerned, and I think the attorneys general will spell out why we need legislation of this type to help them and to help the Securities and Exchange Commission and other agencies that have been frustrated in attempts to eliminate this pernicious and widespread practice.

1974 0716 - GOV (Senate) - The Life Insurance Industry - Part 4 of 4 - Philip Hart (D-MI)

  • (p2533-2536-) - THREE BIGGEST SELLING CASH VALUE- TYPE PLANS IN 1972 BY RANK AND PERCENT - Continued
Company and policy name and rank Percent  1971 13-mo. lapse rate for paid-for business (as measured  
  • Aetna Life Insurance Co.
  1. Ordinary life (NP)
  2. Ordinary life (par)
  3. Life paid up at 95
  1. 50
  2. 18
  3. 6
  1. 21.6 
  2. 23.4
  3. 13.0
  
  • Allstate
  1. Whole life
  2. Modified endowment
  3. Limited pay life (20 pay life).
  1. 52
  2. 16
  3. 6
  1. 29.1
  2. 52.2
  3. 29.1
  
       
  • Pacific Mutual Life Insurance Co.
  1. Life paid up at 65
  2. Adjustable life.
  3. Whole life
  1. 25
  2. 23
  3. 18
  1. 29.2
  2. 18.6 
  3. 18.8
  
       
       
       
  • American Amicable
  • Bankers Life (lowa)
    • Special whole life.
    • Life paid up at 65.
    • Pref. ordinary life
  • College Life Insurance Co. of America
    • Benefactor
    • Career 5
    • Protector
  • Confederation Life
    • Special life to 85
    • Estate guardian 
    • Special end at 95
  • Connecticut Gen Life
    • Whole life
    • Life full paid at 90.
    • Life full paid at 65
  • Connecticut Mutual
    • Whole life
    • Life paid up at 65
    • Graded premium life
  • Crown Life
    • Select ord life
    • Leader ord life
    • Exec whole life
  •  
    

(p2534)

  • Equitable Life Assurance Society of the United States:
    • Adjustable whole life
    • Adjustable whole life
    • Economatic, including benefit provision
    • Executive, limited pay life.
  • Equitable Life (District of Columbia)
    • 10-yr modified life
    • paid up at 65
    • Whole life (Capitalizer) $10,000 min.
    • Whole life (Protector) $9,999 max.
  • Equitable Life (lowa)
    • Ordinary life.
    • Life policy with options at 65
    • Life paidup at 90
  • Executive Life Insurance Co.
    • Whole life
    • 20 payment life
    • Life paid up at 95
  • Farmers New World Life
    • Multiple protector whole life
    • Whole life
    • Multiple protector whole life (nonsmoker)
  • Fidelity Union Life
    • College master whole life
    • Whole life, Estate plan
    • Whole life, par
  • Franklin
    • 20 pay endowment at 65 (Presidential plan)
    • Select whole life (Executive select)
    • Ordinary life paid up at male age 90
  • General American Life
    • Econolife
    • Economaster
    • Double protection to age 70
  • Great Southern Life
    • Life master
    • Accumulator
    • Commercial ord life
  • Great-West Life Assurance Co.
    • Ordinary life (Estate master, pref)
    • Life paid up at 90
    • Life paid up at 85
  • Guardian Life Insurance Co. of America
    • Ordinary life (pref risk) VIP
    • Ordinary
    • Life paid up at 65
  • Hamilton National Life Insurance Co
    • 20-year endowment
    • Ordinary life
    • 20 pay life
  • Hartford Life
    • Life paid up at 97
    • 25 plus ordinary life
    • Whole life with monthly income
  • IDS Life Insurance Co
    • Whole life
    • Life paid up at 95.
  • Indianapolis Life
    • Ordinary life
    • Life paidup at 65
    • Business mens (2- yr mod life)
  • Integon Life Insurance Corp
    • Exec. special (par)
    • Preferred whole life (nonpar)
    • Exec preferred (nonpar)
  • Jefferson National Life Insurance Co.: Ordinary life.. Life paid up at 85.
    Life paid up at 85.
  • Jefferson Standard:
    • Life paid up at 85 (par)
    • Life paid up at 90 (par)
    • Life paid up at 90 (nonpar)
  • John Hancock Mutual Life Insurance Co.
    • Life paid- up at 85
    • Personal security end at 65
    • 3-year mod whole life.
  • Kansas City
  • Kentucky Central Life
  • Lafayette Life Insurance Co.
      

(p2535) - [Bad Print]

  • Life of Virginia
  • Manufacturers Life (MANU Life)
  • Massachusetts Mutual Life Insurance Co.
  • Metropolitan Life
  • Midland 
  • Monarch
  • Mutual Benefit
  • Mutual Life Insurance Co. of New York [Bonk: MONY]
    • Whole life
    • Whole life
    • Keyman life
    • Keyman life
    • Executive equity
  • National Life
    • PEP
    • Life
    • Life at 65
  • Nationwide Life Insurance Co
    • Whole life
    • Life paid up at 95
    • Life paid up at 65
  • New England Mutual
    • ord. (whole) life
    • Econ. Life
    • paid up at 65
  • New York Life Insurance Co
    • Whole life
    • Modified 5-yr term, whole life
    • Modified 10- yr term, whole life
    • Endowment at 95
    • Whole life
    • Life paid up at 95
  • Northern Life Insurance Co.
    • Nonpar whole life
    • Par whole life
    • Preferred life paid up at 95
  • Northwestern Mutual
    • 65 life
    • Extra ordinary life
    • Whole life
  • Northwestern National
    • Whole life (par)
    • Whole life (NP)
    • Life paid up at 65
  • Occidental Life Insurance Co. (California)
    • Whole life (par)
    • Guaranteed whole life
    • Life modified at age 70 
  • Occidental (North Carolina)
    • Whole life paid up at 85
    • Whole life
    • Endowment at 85
  • Ohio National Life Insurance Co.
    • Executive protector whole life
    • Whole life at 98
    • Increased benefit whole life at 65
  • Ohio State
    • Non par ordinary life
    • Par ordinary life
    • Par life at 97
      

(p2536)

  • Pacific Mutual Life Insurance Co
    • Life paid up at 65
    • Adjustable life
    • Whole life
  • Pan-American Life Insurance Co.
    • Whole life series 10
    • Mod III whole life series 10 
    • Mod III whole life series 25
  • Pennsylvania Life Insurance Co.
    • Whole life
    • 20 pay life with annual cash endowments 
    • 20 pay life
  • Penn Mutual
    • Whole life
    • Modified 3 life
    • Life paid up at 6
  • Philadelphia Life Insurance Co
    • Plico select, whole life.. Plico 65 (life paid up at 65).
      President's 25 (life paid up at 95).
  • Phoenix Mutual Life Insurance Co.: Ordinary life.. Ordinary life special  Balanced benefit.
  • Pilot Life Insurance Co.
    • Whole life (NP)
    • Life paid up at 90 (NP).
    • Life paid up at 90 (par) .
  • Provident Life & Accident Insurance Co.
    • Whole life
    • Whole life paid up at 65
    • Whole life paid up at 90
  • Provident Mutual
    • Protector life.
    • Whole life
    • Life full paid at 65
  • Prudential Life Insurance Co.
    • Life paid up at 85
    • Modified life 3
    • Life paid up at 65
    • Modified 25-10 life paid up at 85
  • Pyramid Life Insurance Co.
    • Life paid up at 95
    • Whole life (par)
    • 20 pay life
  • Security Benefit
    • Executive whole life
    • Ordinary life
    • Life paid up at 65
  • Southland
    • Ordinary life
    • Life paid up at 65
    • Executive preferred 
  • Southwestern Life Insurance Co.
    • Straight life
    • Life paid up at 65
    • Life paid up at 95
  • State Farm Life Insurance Co.
    • Special ordinary
    • Executive protector
    • Modified 5
  • Sun Life Insurance Co. of America
    • Life paid up at 95
    • Whole life
    • Life paid up at 90
  • Sun Life Assurance Co. of Canada
    • Whole life
    • Executive sun life at 95
    • Graded premium whole life
  • Transamerican Life Insurance & Annuity Co.
    • Spec translife policy 
  • Travelers Insurance Co.
    • Whole life, ordinary life
    • Whole life, presidential 100
    • Cash settlement at 65
    • Limited payment life at 65
  • Union Central Life Insurance Co.
    • Ordinary life
    • Adjustomatic
    • Life at 65 male
      

(p2537) - [Bad Page]

  •  
      

 

1973 0223 -  GOV (Senate) - The Life Insurance Industry - Part 3 of 4 - Philip Hart (D-MI)

  • (1518-) - The Problem - The Confused Consumer - The Life Insurance Markets: Competition By Confusion, Statement of Herbert S. Denenberg, Insurance Commissioner, Commonwealth of Pennsylvania
  • (1520-1536) - Pennsylvania Insurance Department's Special Mini-Shopper's Guide To Life Insurance - The Lowest and Highest Cost $25,000 Term and $ 10,000 Straight Life Insurance Policies, Prepared by the Pennsylvania Insurance Department, Harrisburg, Pennsylvania
  • (p2119-2120) - STATEMENT OF FRANK S.J. MCINTOSH - I am Frank S.J. McIntosh, owner and manager of the National Life Brokers Association, an organization formed for the explicit purpose of merchandising term life insurance to the American public at a fair and reasonable price.
    • I am the author of A STUDY OF MUTUAL LIFE INSURANCE DIVIDENDS and various other publications. - <WishList>
    • I have been in the life insurance business as agent, general agent, manager and consultant for nineteen years.
    • This statement was prepared after conference and communication with the office of Senator Philip A. Hart (D-Mich.).
    • PURPOSE - I have long been of the opinion that proper price disclosure has been withheld from the American public. I have long been of the opinion that there is no real price competition among American life insurance carriers. I believe that the American consumer or buyer of life insurance is entitled to adequate disclosure this in order to provide him with a meaningful yard stick of price measurement. He should be entitled to information which will enable him to make an intelligent and informed decision as to the proper purchase of life insurance.
      • The purpose of this statement then is two-fold:
        • first to pinpoint and explore some of the fallacies and inaccuracies which abound in the present system of life insurance merchandising; and
        • second to introduce to this committee a method of cost appraisal which is
          • (1) realistic in results
          • (2) easy to understand
          • (3) simple to apply
  • (p2129) - Books In The Insurance Research Service Library Which Primarily Explore And Expose The Fallacy Of Using Life Insurance As An Investment
  • (p / 2137) - FALLACY No. 3 - THE THIRD FALLACY LIES IN THE LACK OF A "SAFETY FACTOR".
    • Dividends, which are not guaranteed, are usually given in dollars and cents which tend to imply creditability.
    • As the only way to judge the future is to look at the past, a quick glance at some dividend history is shown:
      • From 1932 to 1952, twenty leading mutual life insurance companies missed their twenty year projection by an average of 35 of cost comparison, to be accurate, honest and sound must consider both; computations must be made on an annual basis, or cover sufficient periods of time to be truly illustrative and the three major fallacies must be eliminated,
      • THE NAS SYSTEM - The NAS system was designed to meet these rigid requirements. Chart A indicates the differential in cost should the policy be terminated by death. Chart B indicates the cost differential if surrendered for values. Chart C indicates the cost to the family if excess premiums are used to buy dividends in lieu of life insurance.
      • To avoid any possible charge of discrimination, 25 participating and 25 non-participating contracts were selected. Aggregate averages were used. The participating policies are from leading mutual companies, and the non-participating contracts were selected from leading stock companies. $100,000.00 was used as a base policy in order to take full advantage of all the various quantity discounts, and to effect the maximum degree of equality in the comparison.
      • CHART A - ISSUE AGE: 35, POLICY: ORDINARY LIFE AMT. $100,000.00 (A) (AVERAGE) - 25 MUTUAL POLICIES (B) (AVERAGE) - 25 NON-PAR POLICIES, GROSS PREMIUM DIFFERENTIAL $2,376.00 1,876.00 - $500.00 Year
        • From 1940 to 1960
          • Metropolitan paid 54.78% of a twenty year projection.
          • Northwestern Mutual paid $5.17 of a projected $23.00 dividend-an error of 345 .
          • In 1947, Company N projected a dividend of $14.72 and paid absolutely nothing;
          • Prudential projected a $52.31 dividend and paid $4.58-a bad guess amounting to $47.73 or a total error of 1,042.
      • The list could be continued endlessly, but these few suffice to make our point.
      • No economist would predicate a 20 year result on non-guaranteed figures without making allowance for a margin of error, and no insurance buyer should base ultimate policy costs on the naive assumption that dividends will be paid as projected.
        • We automatically provide the client with a 20% safety factor. If, in his considered opinion, this margin seems inadequate a
          larger safety factor, of his own choosing is used.
  •  - The Great Misrepresentation regarding the Cost of Life Insurance, by "A Study of Mutual Life Insurance Dividends", National Analytical Service, Inc".  - <WishList>

1973 – GOV (Senate) – Consumer Redress – John V. Tunney (R-CA)

  • (p166-167) – Neil Gendel, Chairperson, San Francisco Consumer Action – I think we have to look at the big picture for just a minute.
    • I noticed a quote from then President Wilson in 1914 when he talked about our Federal Government.
      • He said:  Suppose you go to Washington and try to get to your government. You will always find while you are politely listened to, the men really listened to are the men who have the biggest stake: the big bankers, the big manufacturers, the big masters of commerce. The government of the U.S. at the present is a foster child of special interests.
    • Much more recently, Dr. Denenberg, the commissioner of insurance in Pennsylvania, made the following statement to the Consumer Federation of America.
      • He said, “Government has been the biggest consumer fraud around.”
      • He also said, “Government has been placed on sale to the highest bidder.”
    • I think in part what he meant was that consumers expect to be protected and represented by their Government. They are flabbergasted when they find out they aren’t. Usually, that’s too late.
  • (p174) – Neil Gendel, Chairperson, San Francisco Consumer Action – That is why, as I quoted before, Dr. Denenberg, the Insurance Commissioner of Pennsylvania, indicated he felt the role that regulatory agencies were playing now was almost useless. Even their actual existence sometimes results in a fraud on the consumer. 
  • (p177) – Neil Gendel, Chairperson, San Francisco Consumer Action – In fact, Congress should require that all agencies with comparative price information make that data public in a manner which will enable consumers to make reasonably informed choices between products and services being sold in the marketplace.
    • Our anti-trust laws have failed to make companies compete in terms of price and quality. A strong incentive to reverse this situation is the release of such comparative price data.
    • The Pennsylvania Insurance Commissioner did so and the life insurance industry was turned on its proverbial ear when consumers discovered that some companies are charging twice as much for the exact same service. Industries and their regulators must be stopped from hiding behind claims of confidentiality when it comes to revealing the prices consumers are charged.
    • Senate Bill 1512 appears to be moving in this direction, although I have not had the opportunity to review its current provisions and cannot endorse it for that reason.