Illustrations - Uses

  • 2015 0816 -  NAIC - LIAC CC, NAIC Proceedings
    • Birny Birnbaum (Center for Economic Justice—CEJ) also expressed support for the suggestion.
      • He said it is important that state insurance regulators determine if illustrations are accomplishing what they are intended to  accomplish, how they are being used and whether consumers understand them.
    • Mr. Birnbaum also suggested that illustrations should be consumer-tested
  • Question:  Should Illustrations be used to compare poilcies? What is the purpose of Illustrations?
    • YES - Mr. Foley responded that, if consumers want to compare policies, they have the illustrations to do so.  --  1999-4 NAIC Proceeding

  • YES - NAIC Working Group Actuary, Illinois? 

    NO - Texas Insurance Commission Rep?  "I hope not."

  • For Sales / Replacements vs Managing Performance
  • Walker v LSW  - Consumer Survey Expert
  • 1991-1992 - SOA - Final Report* of the Task Force for Research on Life Insurance Sales Illustrations, Society of Actuaries - 142p
    • Appendix II - Illustration Examples
    • Type A vs Type B
    • *Opinions expressed herein are those of the Task Force for Research on Life Insurance Sales illustrations and of the Committee for Research on Social Concerns. This report does not purport to represent the views of the Society of Actuaries or of its Board of Governors.
      • Judy A. Faucett (Chairperson), Benjamin J. Bock, Bruce E. Booker, John W. Keller, John R. Skar, Linden N. Cole
  • As we began researching this problem, two questions became central.
    • What criteria should we use to evaluate suggested changes and alternatives?
    • What is the root cause of current problems, and why have previous corrective efforts been so unsuccessful?
  • As research continued, at some point we started to focus on the uses of life policy illustrations.
    • This proved to be a key concept in addressing those two major questions.
    • First, let's list the major user groups: (1) consumers, (2) agents and brokers, (3) life companies, and (4) third-party analysts.
      • We are all familiar with the first three groups.
      • The third-party analyst is a more recent phenomenon and could be a CPA, consulting...."

--   John R. Skar, Fidelity Mutual 

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

  • Churning will be high as comparisons of recent performance and illustrations will “prove” the necessity for a switching.

--  Dale R. Gustafson, Northwestern Mutual

...asks why the really hard questions about the product aren’t reflected in the articles we printed. His nominees for the hard questions are:

1981 11 - SOA - The Actuary, Society of Actuaries - 2p

  • In considering the specific questions posed by the Subgroup, we found it helpful to take a step back, and to first consider two more fundamental questions:
    • (A) What is the purpose of illustrations? (p6-844)
  • Although illustrations can be used for many purposes, the following seem primary to us:
    • To help consumers understand the mechanics of products, that is, their features and how they will operate, as opposed to how they will perform, which can’t be predicted or estimated;  (p6-844)

2019 310 - Letter - AXA Equitable (Brian R. Lessing) to NAIC IULISG – Indexed Universal Life Illustrations Subgroup (Fred Andersen - Chair) - 2019-3, NAIC Proceedings