Chris Kite

  • 2018 0309 - Chris Kite - When IUL becomes VUL - [link]   
  • Here is what I call an IUL Credit Riddle.
    • When does a 0% floor and 12% cap for IUL become a -45% floor and 75% cap and is illustrated at 16%?
    • It can happen with any IUL with leveraged loans when it is 90% loan to value. A 7% credit on the net CV adds on 9*1% spread to effectively illustrate 16%.
    • If the index is 0% and the loan rate is 5%, then the net CV effectively has a 9*5% loss of -45%.
    • If the index is 12% then the 12% on the net CV is leverage by 7%*9 = 63% plus 12% = 75%.
    • It will be many moons before policies will reach this 90% LTV, but sooner for premium finance and educational funding cases.
      • Great upside leverage, but riskier than a VUL account. Or am I missing something?
    • Do you need a well funded gambler to manage these options at older ages and high loan to value?
  • The group first considered a suggestion from Chris Kite (FIPSCO) for a new type of index that would allow consumers to compare the assumptions in the illustration.
    • Mr. Kite said his index has the advantage of prompting the prospect to question assumptions used.
    • Delmer Borah (MassMutual) suggested that consumers are more concerned about total cost than assumptions. 
    • Brenda Cude (Cooperative Extension Service) opined that the target audience does not care about assumptions. (p931)

--  1996 0815 - Report of the Cost Indices Subgroup of the Life Disclosure Working Group - (A) - NAIC

1996-3V2, NAIC Proceedings  

  • 1994-1, NAIC Proceedings - lliustrations Recommended by FIPSCO (Chris Kite) - (Attachment Four-B) - p388
    • FROM: Chris Kite, FIPSCO, DATE: February 22, 1994, RE: Corrections to 1-27-94 Proposal for NAIC Life Insurance Illustration Model Act
      • The Target Premium is $3,360.00.
      • The TAMRA Premium is $18,630.63.
      • The Guideline Level Premium is $6,058.33.
      • The Guideline Single Premium is $66,962.64.
  • I endorse the idea of giving the Society of Actuaries more power to determine supportability.
    • I think the general principles outlined by Harold Phillips (August 19, 1993) are very good in this regard.
    • The percent of 80CSO cost index could be used as a practical tool for testing supportability.
    • Along with a comparison of the crediting rate to long-term market rates, you have clear ways of comparing cost and growth components.
  • The Society of Actuaries could refine definitions of what assumed mortality and interest improvements should not be illustrated.
    • If columns of projected values are not allowed with these assumed improvements, then you could still allow a description by the company of what and why improvements may occur.  (p352)

--  Chris Kite

 1994-1, NAIC Proceedings 

  • 1994-1, NAIC Proceedings - lllustrations Recommended by FIPSCO (Chris Kite) - (Attachment Four-B) - p388
  • 1994-1, NAIC Proceedings
    • Bibliography of Articles and Correspondences Regarding Life Insurance Illustrations and Values, by Chris Kite
  • 1996-1 NAC Proceedings - 6. Discuss Amendments to Life Insurance Buyer's Guide
    • Mr. Dunlap said that a small group consisting of Tony Higgins [North Caroline - Senior Deputy Commissioner], Brenda Cude (University of Illinois Cooperative Extension Service), and Chris Kite (FIPSCO) and himself had rewritten the buyer's guide (Attachment One-C).
    • 1996 - NAIC Draft redlined Life Insurance Buyer's Guide - Draft 1996-3B 931 - 6p 
  • 2016 - Chris Kite - NY Life IUL Analysis - Response by Chris Kite of Life Goes On Consulting to NY Life IUL Analysis, lifegoesonconsulting - [link]
  • 2018 0309 - Chris Kite - When IUL becomes VUL - [link]   
  • 2019 1115 - NAIC - IULISG – Indexed Universal Life Illustrations Subgroup 
  • 1994-1, NAIC Proceedings.
    • FROM: Chris Kite, FIPSCO, DATE: February 22, 1994, RE: Corrections to 1-27-94 Proposal for NAIC Life Insurance Illustration Model Act
      • The Target Premium is $ 3,360.00.
      • The TAMRA Premium is $ 18,630.63.
      • The Guideline Level Premium is $ 6,058.33.
      • The Guideline Single Premium is $ 66,962.64.
  • 1994-1, NAIC Proceedings
    • Bibliography of Articles and Correspondences Regarding Life Insurance Illustrations and Values, by Chris Kite
    • Articles
      • "Flexible Endowment[tm'] Never Let Them See You Lapse." Soon to be published in Life Insurance Selling. Describes how universal life can be adjusted to stay in force under virtually any premium, interest, or cost scenario.
      • "Apples to Oranges, Proposed California Illustration Law" (August 93). Article accepted for publication by Full Coverage magazine. Publication pending purchase of magazine by another firm.
      • "Back to the Future" (Life Insurance Selling March 1993). How to get back to the basics of needs selling by using new products and support tools.
      • "Life Portraits[tm] - Goal Oriented Insurance Illustrations" (Life Insurance Selling October 1992). Principles for improving consumer understanding of how life insurance works.
      • "The Opportunity in Pension Max" (Life Insurance Selling March 1991). A response to Jane Bryant Quinn's critique of Pension Max. She noted FIPSCO's illustration as the only one which fairly portrayed the concept.
      • "The Strange World of Age 95, Illustrations in the Twilight Zone" (Life Insurance Selling May 1990). Understanding the interest and cost dynamics of long-term projections.
      • "Accurate Presentations in the Mortgage Market" (Life Insurance Selling April 1989). How to properly consider the time value of money when using life insurance to protect or prepay a mortgage.
      • "The Seven Year Itch" (Best Review May 1989). A review of TAMRA and how the tax law limits investment oriented insurance. Simpler, less costly alternatives are proposed.
      • "A Look at Zero Cost Loans" (Life Insurance Selling August 1987). Analysis of the use of these policy loans in single premium and other life policies.
      • "Cost Index Eulogy - A proposal for using rates of return" (6-1-92). Paper presented at FIPSCO user group.
    • Other Papers
      • Yield Index Alternatives, May 25, 1993. Paper presented at public hearing on proposed law in California to replace Surrender Cost Index (follow-up letters on 6-7-93, 8-12-93, 9-29-93, 12-15-93).
      • Response to Money magazine's Life Insurance Test (1-28-92) and other Money magazine advice on life insurance (1-5-94, 8-24-90)
      • Letter to Brian Fetchell comparing his Fungible Present Value Analysis to rate of return analysis (1-12-94)
      • Responses to "Should Illustrations Only Show Guarantees?" Series of letters with David Wood of Massachusetts Mutual who supported only showing guarantees. In the original article, Steve Parrish of Central Life advocated showing more than guarantees (10-20-93 to 1-18-94)
      • Response to Jane Bryant Quinn, "Is Your Life Insurance in Danger?" (Jan. 1994)
      • Review of "What Consumers Aren't Told in Sales Illustrations" from Senator Metzenbaum's Committee (9-30-92)