1994-1, NALU (NAIFA) - NAIC Proceedings 
13. The Cover Page for any illustration should contain the annual premium necessary to maintain the policy to maturity based solely upon the guarantees in the policy. This will assist the policyowner in understanding the differences between guaranteed and non-guaranteed policy features. 

1994-2 
Tony Higgins (N.C.) said the problem with an illustration was that there were so many variables to the illustration.

Robert Wilcox (Utah) pointed out that the members of the working group were significantly more knowledgeable than the target audience of the illustration. He said if it was difficult for these regulators to understand the illustrations, think how difficult it would be for a potential buyer to understand them.

1994-3, John Montgomery (Calif.) said that complicated products are not understood by the typical applicant. Commissioner Wilcox said that a "typical applicant" for a sophisticated policy should be a sophisticated applicant, and he acknowledged that the wording might need to be clarified in that instance.

1994-3 NAIC Proc  - Commissioner Robert Hunter (Texas) asked if the assumptions being discussed in Section V of the standards paper would be disclosed in the policy. Commissioner Wilcox responded that they did not need to be disclosed in the same manner that they would be disclosed to an actuary, but that some information would be required.

 

1994-4 NAIC - The working group discussed the drafting note to Section 6 that allowed companies to place the items in the illustrations rather than at the beginning. Mr. Strauss said he did not think this was a good idea because it would allow companies to bury information that they did not want an applicant to see.

 

1995-1 - Commissioner Linda Ruthardt (Mass.) said that at some point people will be able to buy life insurance over the Internet and will create their own illustrations.

 

1995 - PRACTICAL ILLUSTRATIONS AND NONFORFEITURE VALUES, Society of Actuaries - 14p

KEVIN A. MARTi: What I'm thinking about in particular is, Universal Life companies, back in the early 1980s, were illustrating interest rates that we all knew were not realistic long term."

MS. SUSAN OBERMAN SMITH: I think that one problem, even with the illustration disclosure, is that you are still not controlling what the agent actually says to the client, even when he or she sees that illustration.

 

The whole process started in the NAIC, as it had to. If radical changes in the way

we illustrate policies were going to be made, they had to start at the NAIC. The

NAIC was only too well aware of the fact that sales illustrations were the subject of innumerable abuses and they wanted to correct those abuses. Furthermore, the NAIC was being pushed by Senator Howard Metzenbaum who wanted to accuse the regulatory structure of not doing its job and then to bring regulation up to the federal level.

--Frank S. Irish - ASB (Actuarial Standards Board)

1996 - Professional Standards Affecting Life Actuaries -Society of Actuaries

 

1996-4 - "Commissioner Wilcox said that he admitted that the working group had gotten a little sloppy on its terminology, but it had been clear all along that the working group was focusing on sales."

<Bonk  - Question>: What terminology did he think was "sloppy?"