Judy Faucett

  • ?-1991-? - Coopers and Lybrand.
  • Head of the task force on policy illustrations for the American Academy of Actuaries.
  • Actuarial Consultant to the NAIC
  • 1991 04 - SOA - Product, Market, and Distribution Strategies, by Judy A. Faucett, The Actuary, Society of Actuaries - 16p
  • 1991-1992 - SOA - Final Report* of the Task Force for Research on Life Insurance Sales Illustrations - Judy Faucett (Chairperson), Society of Actuaries  ---  [BonkNote]  ---  142p
  • 1992 0623 - GOV (Senate) - Consumer Disclosure of Insurance, Howard Metzenbaum (D-OH)  ---  [BonkNote]
  • Judy Faucett responded that people spend more time buying a microwave than they do an insurance policy.
    • [Bonk:  --  Judy Faucett, former chairperson of the Society Task Force on Illustrations and chair of the Academy Task Force on Illustrations]

1994-1, NAIC Proceedings

  • 1992 0808 - San Francisco Examiner - [Bonk: Is there a Copy anywhere]

08 Aug 1992, Sat The San Francisco Examiner (San Francisco, California) Newspapers.com

  • Most insurance experts acknowledge that the actuaries who put together policy illustrations are taking some liberties.
    • "One thing I've learned over the past couple of years is that one actuary's truth is another's pack of lies," said Judy A. Faucett, a principal at Coopers & Lybrand and head of the task force on policy illustrations for the American Academy of Actuaries.

1994 0306 - NYT - Your Own Account; Putting Life Insurance Into Focus, by Mary Rowland - [link]

  • 1994 06 - Kiplinger's - Buying Life Insurance:  What the Numbers Don' Show - Future cash values may not be as big as they seem, by Kristin Davis -
    • "When we first developed formats for vanishing premiums, no one stepped back and asked, 'What would  the average consumer think by looking at this illustration?' " says  Judy Faucett, an actuary with the accounting firm of Coopers & Lybrand in New York City. 
    • "We knew what we meant, but I'm not sure consumers knew what we meant."
  • Ms. Faucett emphasized the need for substantial education of buyers.

1993-4, NAIC Proc. 

  • 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.

--  Judy Faucett, former chairperson of the Society Task Force on Illustrations and chair of the Academy Task Force on Illustrations

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

  • (p5) - There should be a lot more focus on the need for in-force illustrations.
    • The policies that we sell today have so many moving parts and require frequent monitoring on an ongoing basis to make sure that the program is remaining viable, that enough premium is going into these policies to sustain them, and that the death benefits or cash values are structured the way that the policyholder expects them to build.
    • So, I think there's going to be a lot more focus on in-force illustrations in the future."

--  Judy Faucett, former chairperson of the Society Task Force on Illustrations and chair of the Academy Task Force on Illustrations

1993 - SOA - Sales Illustrations - We Can't Life With Them, But We Can't Live Without Them!, Society of Actuaries  ---  [BonkNote]  ---  20p

  • Judy Faucett: We contacted a number of regulators during the course of our research.
    • The California department was gracious enough to pull 80 complaints that they had received from consumers in the last year, a random 80 complaints.
      • Out of those 80 complaints on life insurance, they determined that 35 of them were illustration-related.
      • Fifty-five percent were for reasons you would have expected; that is, the premium didn't vanish when it was supposed to, or the dividends that were paid weren't as high as what was illustrated.
      • The other 45% believed that they had bought an annuity product and didn't even know that they had life insurance?
    • Maybe there is something that we're not communicating to buyers out there.
      • We may think that our illustrations are straightforward, but somehow the people who aren't actuaries or agents or who just don't understand insurance, are missing the point.
    • Admittedly, not everybody complains, but the number was a lot higher than we had expected, and it was a very different type of complaint than we had expected.  (p10)

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

  • Senator Howard METZENBAUM (D-OH): Do you think these things are going to happen soon?
  • Ms. FAUCETT:  Well, I certainly hope they are going to happen in my lifetime.
  • Senator METZENBAUM:
    • I hope you have a long lifetime, but I sure hope that the insurance industry moves a lot faster than that, and I am not even talking about my lifetime.
    • I think yesterday was too late.
    • I think that for this industry to be guilty of such reprehensible practices and to sit on their hands and do nothing I just believe it is incredible.
    • The only reason they don't do something about it is because the American people don't know about it.
    • I am hopeful that as a result of these hearings they will know more, but I am a realist enough to know that 1 day's news story or commentary, or whatever, with respect to radio or TV does not cause these impregnable companies to move very rapidly.
    • I think it is shameful.
    • In your professional opinion, will this situation get worse for consumers if your recommendations are not adopted by the industry?
  • Ms. FAUCETT: I don't know that it will get worse, but certainly it will not get any better.

1992 0623 - GOV (Senate) - Consumer Disclosure of Insurance, Howard Metzenbaum (D-OH)  ---  [BonkNote]

  • (p1063) - 14. Disclosure and Sales Illustration Practice
    • The actuarial task force has become aware of two professional actuarial groups which are now studying sales illustrations for life insurance contracts.
      • Presentations on behalf of both these groups were made at the December 1991 actuarial task force meeting.
    • Judy Faucett commented on the work of the Society of Actuaries Task Force for Research on Life Insurance Sales Illustrations under the auspices of the Committee for Research on Social Concerns.
      • She is chair of that Society of Actuaries Task Force. No detailed information on the work of this task force was presented at the April 1992 or the June 1992 actuarial task force meetings.
    • Also studying life insurance sales illustrations is another subgroup of the American Academy of Actuaries Committee chaired by Mr. Polkinghorn.
      • (Please see also Section 13, "Non-Guaranteed Element Annual Statement Interrogatories," described above.)
      • Attachment One-L is a transmittal letter from Mr. Polkinghorn, with its attachment, forwarding a report that was recently prepared by his committee.
      • The transmittal letter includes comments on the general subject of life insurance illustrations.
      • A report on potential smoothness tests for non-guaranteed cash values was transmitted with this letter, but it was not included as part of this attachment.
      • Mr. Polkinghorn's transmittal letter requested guidance from the actuarial task force as to whether the smoothness test concept should be pursued further.
      • Mr. Polkinghorn was present at the June 1992 actuarial task force meeting.
      • However, the actuarial task force had only had this material for a relatively short period of time and no position was developed by the actuarial task force regarding the smoothness test.

1992-2B, NAIC Proceedings

  • Commissioner David Lyons (Iowa) asked Ms. Faucett to describe the quotation by her that had recently appeared in the New York Times.
    • She said she was quoted as saying that if you put 10 actuaries in a room you would get 40 conclusions about what the numbers they were examining meant. 
    • She thought it was important for buyers to see how the policy would work but the current approach of the working group would not allow that to happen.
    • Ms. Faucet responded that people spend more time buying a microwave than they do an insurance policy.
    • [Bonk: Ms. Faucett = Judy Faucett, Actuarial Consultant to the NAIC] 
    • <WishList - New York Times Article - "10 actuaries in a room">
    • [Bonk: This is not the Article] - 1993 1115 - The Plain Dealer / NYT - Insurance; Confusion Over Policies Leads to Talk of Change, by Leonard Sloane  ---  [BonkNote]]

1994-1, NAIC Proceedings

  • The second concern, which is related to the first, is the public credibility of our industry.
    • We've all heard a lot about the junk bond crisis.
      • Is the next crisis going to be junk illustrations?
    • Certainly buyers, agents, third-party advisors, regulators, legislators and even other insurance companies have questioned the credibility and realizability of our illustrations.
    • Industry and professional groups have expressed concern over perceived problems with illustrations. 

--  Judy Faucett, former chairperson of the Society Task Force on Illustrations and chair of the Academy Task Force on Illustrations

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