• 5. Adopt November 21 and December 1 Minutes to Life Marketing Practices to Senior Citizens - Working Group and Amendments to Life Insurance Disclosure Model Regulation and Disclo­sure
  Form
• Commissioner David Lyons (Iowa) commended David Rodgers (Wash.), Jim Swenson (Ore.), Dean Gallagher (Okla.), Bob Wright (Va.), Roger Strauss (Iowa) and NAIC staff for their participation in development of the work product of this group.
  • He said there are three forms to be considered by the committee: the amendments to the Life Insurance Disclosure Model Regulation, a new disclosure form for consumers entitled "Financial Review of this Policy" and a resolution to the Executive Committee pertaining to the Rules Governing the Advertising of Life Insurance.
  • He asked that consideration be given by the parent committee to the continuation of a working group to address the remaining issues on these life products.
    • The first issue is the actuarial review of the value of the products which will be conducted by an NAIC life and health staff actuary.
    • The second item is a review being conducted by Jim Swenson of the individual industry marketing practices to enable identification of those methodologies which would allow for delivery of the disclosure form to the consumer at the point of sale.
  • Commissioner Lyons indicated that there is one further technical correction to two sections of the Life Insurance Disclosure Model Regulation.
    • He assured the committee that working group members are in agreement with this amendment to Section 6E(2)(0 and Section SI. The language as proposed by industry would delete inconsistent language in those two sections which require that this disclosure form alternately be "attached to the policy'' and "delivered to the insured."
    • He said the suggested amendment provides for "simultaneous delivery'' and provides the prominence and timeliness required for the disclosure form. As originally drafted, the language "attached to the policy" connotes that the form is a part of the policy and subject to the Entire Contract Clause. 
    • Commissioner Lyons noted that the company is still responsible for the information contained on the disclosure form and that this amendment in no way reduces the ability of the insurance department or the applicant to take action on any misrepresentations of an agent.
• Ed Zimmerman (ACLI) said the disclosure form is not a part of the policy, but that does not mean an insurance department or an applicant would not have a cause of action if there were misrepresentations by an agent.
  • He reminded the committee that this disclosure form was intended to be a simple, straight forward form to facilitate consumer understanding.
• Neil Rector (Ohio) suggested language for a drafting note.
• Upon motion duly made and seconded, the committee adopted language for a drafting note to clarify that the amended language does not diminish the insurer's responsibility for the actions of an agent in any misrepresentations on the disclosure form.
• Upon further motion duly made and seconded, the Life Insurance Disclosure Model Regulation, as amended, and the Financial Review of This Policy disclosure form were adopted (Attachments Three and Four respectively).

1991-1A, NAIC Proceedings