Informed Policymakers

  • The Academy views its role in the government relations arena as providing information and actuarial analysis to public policy decision makers so that policy decisions can be made with informed judgment.
  • For example, the determination of required contribution levels to plans to provide benefits and the setting of appropriate reserve levels to meet future obligations are actuarial in nature.

1984 – AAA – Journal, American Academy of Actuaries

  • On behalf of the consumer representatives.
  • Some suggestions to make the advisory committees more relevant to the NAIC include:
    • NAIC could assist consumer groups with technical assistance on selected issues, e.g the concept of consumer actuary.

1993 0302 – Letter – Consumers Union to NAIC Subgroup to Study Advisory Committee Procedures and Protocols – (EX) – NAIC  —  [BonkNote – Subgroup] – Attachment 2 – 

Mary Griffin, Consumers Union, Insurance Counsel, Washington Office

  • In 1994 I was selected as a funded ….
    • In these meetings, groups work consumer representative to the on specific charges they have identified National Association of Insurance or that have been assigned to them by Commissioners (NAIC).
  • In reality, much of what NAIC consumer representatives do to represent consumers is to educate regulators.
    • If regulators learn about issues only by listening to the industry, their knowledge is unquestionably biased.

1997 – AP – What Does it Mean to be a Consumer Representative?, by Brenda Cude – 3p 

  • Federal Insurance Office Act
  • Federal Insurance Expertise.  Insurance plays a vital role in the smooth and efficient functioning of our economy, but the credit crisis highlighted the lack of expertise within the federal government regarding the industry, especially during the collapse of American International Group (AIG) and last year’s turmoil in the bond insurance markets.
    • A Federal Insurance Office will provide national policymakers with access to the information and resources needed to respond to crises, mitigate systemic risks, and help ensure a well functioning financial system.
  • International Coordination.  Although America’s insurance markets still operate on a state-by-state basis, today’s markets are global.
    • The Federal Insurance Office will therefore provide a unified voice on insurance matters for the United States in global deliberations.

2009 06 – DOTT – Financial Regulatory Reform, A New Foundation: Rebuilding Financial Supervision and Regulation, Geithner – [PDF-93p-GooglePlay]

  • We believe it is very important for the subcommittee, and other committees in Congress with jurisdiction over insurance, to have a sound understanding of how our industry operates…
  • … I would like to focus my remarks this morning on why the ACLI believes that the new Federal Insurance Office, FIO, is an extremely important new player in the insurance arena and why it is important for that office to be fully funded and staffed as quickly as possible.  (p26)

— ACLI – Statement of Gary E. Hughes, Executive Vice President & General Counsel, American Council of Life Insurers – Part 1

2011 0728 and 1025 – GOV (House) – Insurance Oversight: Policy Implications for U.S. Consumers, Businesses and Jobs – Part 1 (2011 0728), Part 2 (2011 1025), Judy Biggert (R-IL) – [PDF-285p, VIDEO-?]

MAV – Market-Adjusted Valuation

  • Year? – BIS – ICS – Market-adjusted Valuation – Executive Summary – 2p
  • 2017 1205 – Swiss Re – Valuing Insurance Liabilities for Market Adjusted Valuation with Cost of Capital Margin over Current Estimate – 17p
  • Actuarial
  • SOA 
    • 2015 03 – SOA – Update on Regulatory Developments, by Francis de Regnaucourt – 5p
    • 2016 05 – SOA – Emerging Global Capital Standards for Insurance, by Liz Dietrich and Ian Adamczyk, isn-2016-iss-68-dietrich-adamczyk, Society of Actuaries – 4p
    • 2017 – SOA – The Insurance Capital Standard (ICS) Moves Forward, by Tom Herget, rm-2017-iss-38-herget- 3p
  • 2016 0710 – IAIS – Risk-based Global Insurance Capital Standard, Version 1.0 – Public Consultation Document – Comments due by 19 October 2016 – 175p – [BonkNote]
    • 4.1 Market adjusted valuation (MAV) approach – Comments – 276p
  • 2017 0117 – IAIS – MAV Discounting – 19p
    • Whether there is a need for liability bucketing and if so the nature of that liability bucketing,  i.e. should there be a different approach to the adjustment depending on the nature of the liabilities 
    • Summary comparison of options considered
  • Donald R. Sondergeld:  Our topic is related to surrender values of individual life and annuity products and not to group annuity contracts, which for many years have included a market value adjustment in determining surrender values.
    • I’m sure some of you have read the feature article in the December, 1985 Best’s Review on New Product Profitability. It was titled, “A Tale of Two Countries”, and was written by Fred Richardson, F.S.A., President of the Hartford Life Insurance Companies.
      • That article compares the historical development of cash value products in the United States and the United Kingdom, and indicates the lessons that can be learned from our British relatives.
      • The major ones are the need for market adjusted cash values and the use of cash flow matching.

1986 – SOA – Market Value Adjusted Products, rsa86v12n29 – Society of Actuaries – 22p

  • <WishList – December, 1985 Best’s Review on New Product Profitability. It was titled, “A Tale of Two Countries”, and was written by Fred Richardson, F.S.A., President of the Hartford Life Insurance Companies.>

Fraud

  • NAIC – Anti-Fraud (EX6) Subcommittee
  • Fraudsters
  • The fact that we charge people fees that we have disclosed and that fees reduce the value of your policy, and if your policy keeps reducing in value, it will lapse, is not a fraud.
    • That’s common sense.
    • That’s how life insurance works.  (p171) 

—  Closing Argument by Mr. Martens, Defendant Attorney – LSW, Life Insurance Company of the Southwest

2014 0425 – DOC 813 – Trial Transcript – Day 12 – Walker v LSW – 224p

  • content.naic.org/cipr-topics/insurance-fraud
    • Insurance Fraud
      • Insurance fraud occurs when an insurance company, agent, adjuster or consumer commits a deliberate deception in order to obtain an illegitimate gain.
        • It can occur during the process of buying, using, selling, or underwriting insurance.
  • 1980-1, NAIC Proceedings – 1979 1203 – Wesley J. Kinder, California Insurance Commissioner, Vice-Presidential Address – re: FTC Report – (p8-13) / (p63-68)
    • The FTC efforts to deter state action on life insurance cost disclosure, under the guise of assisting the states, when in fact, the game plan was to initiate an FTC regulation on the basis that the states failed to act, might be described as a federal fraud.
      • 1979 – FTC – Report – Life Insurance Cost Disclosure, Federal Trade Commission – 460p
    • The FTC trials-by-the-news-media violate the basic concept of due process and fair play.
  • Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009
  • National Insurance Crime Bureau’s Law Enforcement Advisory Committee

Consumer Understanding

  • James Hunt (National Insurance Consumer Organization) stated that in his experience most people are very confused about the coverage they have.
  • Mr. Morgan (Ohio)
    • stated that his experience was that consumers did not understand what they had purchased.
    • He said there should be an understandable way of saying that the company is guessing because there is no way to know what will happen in the future.

1993-1, NAIC Proceedings

  • Judy FAUCETT: In line with John’s comments, we were told by one group that actually runs focus groups that if you got a group of recent purchasers of insurance in a room, you might get responses of what they think they did or what they think they should have done, as opposed to what they actually did.

1991 – SOA – Illustrations, Society of Actuaries – 20p

  • We have to get out of our mode of talking about these policies in language that can only be understood by the person who wrote the language.
    • I find, after 30 years plus of experience in the life insurance business, that there is jargon used in illustrations that I don’t understand.
    • I can have difficulty in taking an illustration and figuring out what in the world the authors are trying to illustrate and how they are doing it.

—  Robert E. Wilcox – Chairman of the Life Disclosure Working Group (NAIC)

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

  • If we are going to have a group of consumers of our products who are satisfied with what they get, we have to meet their expectations.
  • Obviously, there are two adjustment points whereby that can be accomplished.
    • One is that you can change the outcome to match the expectations.
    • The other is to change the expectation to match the outcome.

— Robert E. Wilcox – Chairman of the Life Disclosure Working Group (NAIC)

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

Aggregation Method

  • Date? – NAIC – NAIC’s Interpretive Guidance on ICS Comparability Assessment Framework – 3p
  • Group Capital Calculation (E) Working Group – 
  • CIPR NAIC – Group Capital Calculation – [link]
    • U.S. state insurance regulators have adopted a group capital calculation (GCC) for use in solvency monitoring activities.
  • (p3) – The Aggregation Method will be informed by our Group Capital Calculation (GCC) and by the proposed Building Block Approach recently released by the Federal Reserve for Savings and Loan Holding Companies predominantly engaged in insurance operations.
  • (p3) – These approaches build off our U.S. legal entity Risk Based Capital (RBC), which has been tested over time, and thus we are confident that the resulting group capital methodology will be a more meaningful and valuable tool for U.S. insurance regulators

Testimony – NAIC – Eric Cioppa – 7p

  • 2019 0912 – GOV (Senate-Banking) – Developments in Global Insurance Regulatory and Supervisory Forums – [PDF-109p – Video-Senate Page

Duty

  • Duty to Disclose
  • Duty to Read
  • Duty to Speak
  • Fiduciary Duty
  • Memorandum of Law in Support of American General Life Insurance Company’s Motion for Summary Judgement
    • See Watkins v. HRRW, LLC, 2006 WL 3327659, at *8
      (“Tennessee courts, however, have rejected breach of fiduciary duty claims against insurance agents in various factual circumstances.”);
    • see also Weiss v. State Farm Fire & Cas. Co., 107 S.W.3d 503 (Tenn. Ct. App. 2001) (finding that an insurance agent had no duty to explain plaintiff’s coverage or make sure she understood her policy).

2016 – LC – Ianello v American General  —  [BonkNote] 

Narrative Summary

The narrative summary consists of:

(1) a brief description of the policy being illustrated and the statement that the policy being illustrated is a life insurance policy;

(2) a brief description of the premium outlay or contract premium as applicable for that policy;

(3) a guaranteed maturity premium to keep the policy in force for all policies that do not require contract premiums, typically universal life policies, assuming no loans or withdrawals;

(4) a brief description of the policy features, supplemental benefits and riders on the policy being illustrated;

(5) identification and a brief description of the columns and key terms used in the illustration; and

(6) a statement similar in substance to the following:

  • “This illustration assumes that the nonguaranteed elements illustrated will continue unchanged for all years shown.
    • This is not likely to occur and actual results may be more or less favorable than those shown.”

If the premium calculated exceeds the guideline level premium, then it does not have to be shown.

However, the illustration must clearly disclose that the guideline level premium will not fund the contract to maturity based on the guaranteed assumptions.

  • If the premium calculated exceeds the guideline level premium and you determine that you want to show it, then the insurer must disclose that the premium is in violation of the guideline premium test.
  • You are free to choose any type of premium paying period in calculating the guaranteed maturity premium.

—  David N. Karo

1996 – SOA – Implementing the Illustration Regulation: The Clock Is Ticking, Society of Actuaries – 25p

Missouri – Insurance Commissioners

Director Tenure
Chlora Lindley-Myers, Director March 6, 2017 to Present
John F. Rehagen, Acting Director February 7, 2017 to March 6, 2017
John M. Huff, Director February 6, 2009 to February 6, 2017
Kip Stetzler, Acting Director January 10, 2009 to February 5, 2009
Linda Bohrer, Acting Director June 1, 2008 to January 9, 2009
Douglas M. Ommen January 2, 2007 to June 1, 2008
W. Dale Finke January 10, 2005 to January 2, 2007
Scott B. Lakin March 15, 2001 to January10, 2005
Keith Wenzel May 10, 1999 to March 15, 2001
A.W. McPherson, Acting Director October 31, 1998 to May 10, 1999
Jay Angoff February 16, 1993 to October 1998
Lewis E. Melahn July 3, 1989 to February 11, 1993
Larry C. Call, Acting Director May 24, 1989 to July 1, 1989
William A. Bennett February 28, 1989 to May 19, 1989
Larry C. Call, Acting Director October 3, 1988 to February 27, 1989
Lewis R. Crist January 6, 1986 to October 1, 1988
Mary Hall, Acting Director September 30, 1985 to January 5, 1986
C. Donald Ainsworth February 18, 1981 to September 27, 1985
Wm. Arthur Jones, Acting Director September 1, 1980 to February 17, 1981
Richard J. Fredrick June 1, 1979 to August 30, 1980
J. B. Buxton June 1, 1977 to May 31, 1979
H. W. Edmiston June 25, 1975 to May 31, 1977
John Webb, Acting Director June 1, 1975 to June 25, 1975
Edward G. Farmer, Jr April 1, 1973 to May 31, 1975
James P. Dalton November 1, 1972 to March 31, 1973
William Y. McCaskill May 22, 1969 to October 31, 1972
Robert D. Scharz January 11, 1965 to May 21, 1969
Ralph H. Duggins September 6, 1963 to January 11, 1965
Jack L. Clay December 8, 1961 to September 6, 1963
Jack L. Clay, Acting Director November 15, 1961 to December 8, 1961
C. Lawrence Leggett November 25, 1949 to November 15, 1961
Owen G. Jackson November 15, 1945 to November 24, 1949
Edward L. Scheufler September 29, 1941 to November 14, 1945
Ray B. Lucas January 10, 1939 to September 29, 1941
F. P. Sizer, Acting Director January 3, 1939 to January 9, 1939
George A. S. Robertson October 29, 1937 to January 2, 1939
R. E. O’Malley July 1, 1933 to October 19, 1937
Jos. B. Thompson March 10, 1929 to July 1, 1933
Ben C. Hyde October 1, 1921 to March 10, 1929
Alfred L. Harty May 1, 1918 to October 1, 1921
Claude Clark, Acting Director March 5, 1918 to May 1, 1918
W. K. Chron September 1915 to March 5, 1918
Charles G. Revelle March 1913 to September 1915
Frank Blake November 1909 to March 1913
John Kennish March 1909 to November 1909
W. D. Vandiver April 1905 to March 1909
Robert G. Yates November 1902 to April 1905
Edward E. Yates June 1902 to November 1902
Thomas H. Wagner August 1901 to June 1902
Ed T. Orear March 1897 to August 1901
James R. Waddill March 1893 to March 1897
Christopher P. Ellerbe March 1889 to March 1893
Alfred Carr March 1885 to March 1889
John F. Williams March 1881 to March 1885
William S. Relfe March 1877 to March 1881
Celsus Price July 1875 to March 1877
Francis P. Blair October 1873 to July 1875
William Selby March 1873 to October 1873
Miles Sells June 1872 to March 1873
Willis King March 1869 to June 1872

Regulations.gov

  • 2008 – SEC – Emergency Order Pursuant to Section 12(k)(2) of the Securities Exchange Act of 1934 Taking Temporary Action to Respond to  Market Developments [Release No. 34-58592; File No. s7-26-08] – [link]
  • 2008 – SEC – RFC –  File Number S7-14-08 Indexed Annuities and Certain Other Insurance Contracts Proposed Rule, Files No. 33-8976 and 33-8933
    • Final Rule – 155p
  • 2009 – SEC – RFC – File No. S7-11-09, The Economic Imperative for the Application of the Fiduciary Standard of Conduct to all Providers of Investment Advice
  • 2010 0820 – SEC – (Release No. 34-62718A; File No. SR-FINRA-2010-039), Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of Proposed Rule Change to Adopt FINRA Rules 2090 (Know Your Customer) and 2111
    (Suitability) in the Consolidated FINRA Rulebook; Correction – 50p
  • 2020 1008 – FIO ICS Study
    • 2020 1008 – FIO – Notice – Federal Insurance Office Study on the Insurance Capital Standard Posted by the Department of the Treasury – [link-Federal Register]
    • 2020 1008 – FIO – Federal Insurance Office Study on the Insurance Capital Standard Posted by the Department of the Treasury on Oct 8, 2020 – [link-Regulation.gov]
      • 14 Comments
    • 2021 0210 – FIO/FACI – FACI International Subcommittee Perspectives on the Request for Information (RFI) on a FIO Study of the ICS – 22p
  • 2016 – FRB – RFC – Capital Requirements for Supervised Institutions Significantly Engaged in Insurance Activities [R-1539], 28 Comments – [link-Federal Reserve]
  • 2019 – FRB – RFC – Regulatory Capital Rules: Risk-Based Capital Requirements for Depository Institution Holding Companies Significantly Engaged in Insurance Activities [R-1673], 25 Comments – [link-Federal Reserve]
  • 2019 0906 – Federal Reserve Board invites public comment on proposal to establish capital requirements for certain insurance companies supervised by the Board
    • federalreserve.gov/newsevents/pressreleases/bcreg20190906a.htm 
    • Building Block Approach (BBA) 
    • Comparing Capital Requirements in Different Regulatory Frameworks – 40p   
    • Comments – [link-Federal Reserve]   
    • 2019 1024 – Federal Register – Vol. 84, No. 206 / Thursday, October 24, 2019 / Proposed Rules – 62p
      • Insurers match life insurance and annuity long-duration products with a long-term investment strategy. (p6/57245)
      • In 2008, nearly half the largest life insurance groups experienced losses that were above their authorized control level regulatory capital requirement. (p57/57296)
  • 2010 – SEC – RFC – Security-Based Swap Dealers and Major Security-Based Swap Participants:
    Title VII Provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act
  • 2010 – SEC – RFC – Comments on Concept Release: Definitions Contained in Title VII of Dodd-Frank Wall Street Reform and Consumer Protection Act, [Release No. 34-62717; File No. S7-16-10]
  • 2020 – Regulations.gov / IRS –  Computation and Reporting of Reserves for Life Insurance Companies (REG-132529-17) – [link]
    • 3 Comments
  • 2020 1008 – FIO ICS Study
    • 2020 1008 – FIO – Notice – Federal Insurance Office Study on the Insurance Capital Standard Posted by the Department of the Treasury – [link-Federal Register]
    • 2020 1008 – FIO – Federal Insurance Office Study on the Insurance Capital Standard Posted by the Department of the Treasury on Oct 8, 2020 – [link- Regulations.gov]
      • 14 Comments
    • 2021 0210 – FIO/FACI – FACI International Subcommittee Perspectives on the Request for Information (RFI) on a FIO Study of the ICS – 22p
  • 2022 1014 – Federal Reserve Board invites public comment on an advance notice of proposed rulemaking to enhance regulators’ ability to resolve large banks in an orderly way should they fail  [link]

IAIS – Index

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