Leslie Scism

  • AIG
  • IUL - Indexed Universal Life
  • PRT - Pension Risk Transfers
  • Universal Life
  • Vanishing Premium
  • 1995 0103 - WSJ - Fine Print Victims: Some Agents 'Churn' Life Insurance Policies, Hurt Their Customers, Prudential, by Leslie Scism - <WishList>
  • 1997 0807 - WSJ - Internal Reports Depict Forgery, Fraud, Suggest Tighter Controls, By Leslie Scism and Scot J. Paltrow - [link]
    • In 1982, Prudential Insurance Co. of America's internal auditors had a warning for directors: Some of the company's agents were boosting sales through trickery and fraud.
    • <WishList> - The 1982 internal-audit report to the board's audit committee, the earliest report reviewed by the Journal, suggested that the practice wasn't new at Prudential even then.
      • "We continue to encounter numerous cases of improper marketing practices," the auditors stated.
      • Their report singled out as an example a branch in the Midwest where about 1,100 policies had been churned over a 2-year span "without the full knowledge and understanding of the policyholders."
      • [Bonk: Iowa-?, GOV Hearing-?]
    • <WishList>- Dated June 30, 1994, the Coopers report concluded that years of warnings in the internal-audit reports hadn't been properly heeded by senior management.
    • <WishList>- A July 1996 report by a task force of state insurance regulators who investigated the company -- and fined it $35 million -- concluded that management had reason to know of the wrongdoing "as early as 1992."
    • Milan Johnson, a Prudential vice president and associate controller who signed audit reports to the board through 1986, says the committee had been "very interested" in problems with sales practices.
  • 2008 1030 - WSJ - Securities-Lending Sector Feels Credit Squeeze, by Craig Karmin and Leslie Scism - <WishList>
  • [newspapers.com]
    • 1994 1211 - The Cincinnati Enquirer/ WSJ - Insurance Companies Latest Target for Savvy Investors, by Leslie Scism -  PAGE 79, Cincinnati, Ohio
    • 1995 0729 - The Press Democrat / Dow Jones -  Insurance Companies reveal vulnerability, by Leslie Scism
    • 1995 1103 - The Press Democrat - New Look at Life Insurance Commissions, by Leslie Scism
    • 1996 - Insurer Builds Reputation for Strongly Contesting Claims, by Leslie Scism -
      • AIG / Subsidiary National Union Fire Insurance
    • 1996 1103 - Battle Creek Enquirer / WSJ - Insurance Relief on the Way, by Leslie Scism  - (Battle Creek, Michigan) - [link-Newspapers.com]
    • 1997 0223 - The Courier Journal / WSJ - Hoosier Insurance Tycoon Finally Gets some Respect - [Conseco, Stephen Hilbert], by Leslie Scism - newspapers.com/image/110232925
    • 1997 0329 - The Courier-Journal / WSJ - Louisville Lawyer Stripped of Prudential Case - J. Bruce Miller Denies He Did Anything Wrong, by Leslie Scism -
      • A year ago, Louisville lawyer J.  Bruce Miller was riding high. Representing ex-employees suing Prudential Insurance Co. of America in connection with accusations of deceptive sales practices, he had the company on the defensive about alleged destruction of evidence.
  • 1995 0103 - WSJ - Fine Print Victims: Some Agents 'Churn' Life Insurance Policies, Hurt Their Customers, Prudential, by Leslie Scism - <WishList>
    • 2000 - LR - The Filed Rate Doctrine and Insurance Fraud Litigation, by Allan Kanner - 33p
    • 2020 - - The Influence of Client Corporate Social Responsibility, by LE Hickman - <WishList>
  • 1997 0703 - WSJ - U.S. Probed Prudential Role In Sales-Practice Lawsuits, By Scot J. Paltrow and Leslie Scism - [link]
  • 1997 1024 - WSJ - MONY Wins Dismissal of Suit Over 'Vanishing Premium' Policies, by Leslie Scism - [link]
  • 2009 0408 - WSJ - U.S. to Offer Aid to Life Insurers: Firms Face Capital Crunch; How Much They Will Get From TARP Remains Unclear, By Scott Patterson, Deborah Solomon and Leslie Scism - [link]
    • Shares of life insurers have fallen more than 40% this year.
    • Their troubles led to a string of rating-agency downgrades that, in a vicious cycle, made it more difficult for some insurers to raise funds.
  • 2016 0901 - WSJ - Life Insurance Customers Push Back Over Surprise Cost Increases: Policyholders are filing suit, as big U.S. life insurers blame the Federal Reserve’s decision to keep interest rates lower for longer, by Leslie Scism - [link-Gift]
  • 2018 0919 - WSJ - Universal Life Insurance, a 1980s Sensation, Has Backfired: A long decline in  interest rates caused premiums to soar when they were supposed to stay level, by Leslie Scism - [link]
    • A popular insurance product of the 1980s and 1990s has come back to bite many older Americans.
  • 2020 0107 - WSJ - It’s the Hottest Thing in Life Insurance. Are Buyers Aware of the Risks? Regulators worry insurers are underplaying the dangers of a product tied to the performance of the U.S. stock market, by Leslie Scism - [link]
    • One concern is that existing consumer materials “can lead to unrealistic expectations,” said Fred Andersen, an actuary with the Minnesota Department of Insurance who is a leader in the effort at the National Association of Insurance Commissioners.
    • Paul Graham, chief actuary with trade group American Council of Life Insurers, said the industry supports development of materials and disclosures that help consumers “make the right decisions,” though “we do have different views amongst our companies as to how to best accomplish that on rather complex IUL products.”
    • Some regulators and advisers fear indexed universal life will offer a repeat of what many consumers experienced with a policy known as basic universal life.
      • Those policies were a sensation in the 1980s when U.S. interest rates were in double digits.
  • 2022 1224 - WSJ - Stock Selloff Hits Life Insurers’ Fastest-Growing Product Indexed universal-life policies grew with low rates and soaring markets, by Leslie Scism - [link]
    • The insider joke about indexed universal-life policies is that it takes an actuary, an attorney and maybe even an engineer to understand how the product works.
    • Some regulators worry that hypothetical projections of savings growth using these indexes are overly rosy and can lead to unrealistic consumer expectations.
    • If a projection proves faulty, a buyer could be stuck with an unaffordable insurance bill.
  • 2023 0504 - WSJ / Transcript - Podcast - How Paperwork Errors Cost Families Life-Insurance Payouts Hundreds of families who paid life-insurance premiums were denied millions of dollars in death benefits because of missteps by both their employer and their insurance company. WSJ reporter Leslie Scism joins host J.R. Whalen to explain how it happened - [VIDEO-YouTube] - [WSJ-link] -
  • 1995 0103 - WSJ - Fine Print Victims: Some Agents 'Churn' Life Insurance Policies, Hurt Their Customers, Prudential, by Leslie Scism - <WishList>
    • 2000 - LR - The Filed Rate Doctrine and Insurance Fraud Litigation, by Allan Kanner - 33p
    • 2020 - - The Influence of Client Corporate Social Responsibility, by LE Hickman - <WishList>
  • 1995 1103 - The Press Democrat / Dow Jones - New Look at Life Insurance Commissions, by Leslie Scism - [link-newspapers.com]
  • 1996 0821 - WSJ - Suits Claim Prudential Managers Destroyed Targeted Documents, by Leslie Scism - [link]
  • 1997 0703 - WSJ - U.S. Probed Prudential Role In Sales-Practice Lawsuits, By Scot J. Paltrow and Leslie Scism - [link]
  • 1997 0807 - WSJ - Internal Reports Depict Forgery, Fraud, Suggest Tighter Controls, By Leslie Scism and Scot J. Paltrow - [link]
    • In 1982, Prudential Insurance Co. of America's internal auditors had a warning for directors: Some of the company's agents were boosting sales through trickery and fraud.
    • <WishList> - The 1982 internal-audit report to the board's audit committee, the earliest report reviewed by the Journal, suggested that the practice wasn't new at Prudential even then.
      • "We continue to encounter numerous cases of improper marketing practices," the auditors stated.
      • Their report singled out as an example a branch in the Midwest where about 1,100 policies had been churned over a 2-year span "without the full knowledge and understanding of the policyholders."
      • [Bonk: Iowa-?, GOV Hearing-?]
    • <WishList>- Dated June 30, 1994, the Coopers report concluded that years of warnings in the internal-audit reports hadn't been properly heeded by senior management.
    • <WishList>- A July 1996 report by a task force of state insurance regulators who investigated the company -- and fined it $35 million -- concluded that management had reason to know of the wrongdoing "as early as 1992."
    • Milan Johnson, a Prudential vice president and associate controller who signed audit reports to the board through 1986, says the committee had been "very interested" in problems with sales practices.
      • As for why the those problems spread, Mr. Johnson, now retired from Prudential, says, "I can't explain it. I think there was a significant amount of attention placed to the problem, but obviously there wasn't enough."
    • Michael P. Malakoff, one of the lawyers for the dissident policyholders, argued in a court filing that before the settlement was reached, he repeatedly urged Melvyn I. Weiss, the lead plaintiffs' lawyer, to demand access to the audits. In his appeal, Mr. Malakoff accused Mr. Weiss of losing interest in aggressively pursuing the case, once it was clear that the plaintiffs' lawyers would receive a big fee -- ultimately as much as $90 million -- from Prudential.
      • In an affidavit, Mr. Weiss confirmed that he never sought a court order to force Prudential to turn over the audits. He said the material wasn't needed because the "plaintiffs assumed in their negotiations that those reports would support their worst suspicions" and bargained accordingly. Mr. Weiss's team also interviewed an ex-Prudential auditor who discussed findings of reports from the 1980s. As a result, Mr. Weiss said in the affidavit, his team obtained "critical information" about the auditors' activities without seeing their audits.
      • In an interview, Mr. Weiss says the settlement is a good deal for his clients. Asked about Mr. Malakoff's suggestions that legal strategy was dictated by the big fee, he says: "Nonsense."
  • 1997 1024 - WSJ - MONY Wins Dismissal of Suit Over 'Vanishing Premium' Policies, by Leslie Scism - [link]
  • 1998 0123 - South Florida Sun Sentinel - Insurers curb churning but buyers still have stories, by Leslie Scism - [link-newspapers.com]
  • 2008 1025 - WSJ - U.S. Mulls Widening Bailout to Insurers, By Deborah Solomon and Leslie Scism - [link]
  • 2008 1030 - WSJ - Securities-Lending Sector Feels Credit Squeeze, by Craig Karmin and Leslie Scism - <WishList>
  • 2010 1119 - WSJ - Insurers Test Data Profiles to Identify Risky Clients, By Leslie Scism and Mark Maremont - [link]
  • 2010 0205 - WSJ - New York Reduces Life-Insurance Reserves To Reduce Allure of ‘Captives’, by Leslie Scism - [link]
    • a type of insurance often called “universal life with secondary guarantees.”
      • These policies include often-complicated guarantees to lock in the cost that owners must pay to keep the policies in force until they die.
      • They were hot sellers over the past decade among wealthy families, particularly for estate planning.
  • 2010 0403 - WSJ - Rock By Night, Life Insurance By Day, byLeslie Scism - [link]
    • Gene Simmons, KISS, Cool Springs Life,  David R. Carpenter, formerly of insurance powerhouse Transamerica
  • 2012 1202 - WSJ - Don't Leap at Annuity Buyback Offers: They make sense for insurers. But holders of older variable contracts might do better to sit tight., by Leslie Scism - [link]
  • 2014 0921 (Updated) - WSJ - New York Probes Indexed Universal Life Sales Practices Benjamin Lawsky Concerned Insurance Companies Giving Optimistic Projections, By Leslie Scism - [link]
    • The letter from Mr. Lawsky's office was sent earlier this month to 134 insurers that operate in the state, one of the biggest markets for life insurance in the U.S.
    • The letter seeks responses by Oct. 1 to questions about the insurers' presentations of potential gains to prospective buyers in so-called illustrations.
  • 2014 0926 - WSJ - Scrutiny of Stock-Linked Insurance Policies Grows: Some Say Performance Projections for Indexed Universal Life Are Too Rosy, By Leslie Scism - [link]
  • 2015 0809 - WSJ - Retirees Stung by ‘Universal Life’ Cost: Low interest rates lead to soaring premiums for those who bought in the 1980s, by Leslie Scism - [link]
  • 2016 - WSJ - Life Insurance Customers Push Back Over Surprise Cost Increases: Policyholders are filing suit, as big U.S. life insurers blame the Federal Reserve’s decision to keep interest rates lower for longer, by Leslie Scism - [link]
    • 1 September, 2016
      • I suggest Mr Foos go back to the illustration provided to him in 2003 which showed the projected values of the policy at both "current" rates and guaranteed rates.
      • He, like so many millions, believe that current rates will be forever.
      • Doesn't anyone remember what happened in the 80's with universal life , when companies like Executive Life were offering rates of 10-12% on their policies only to see them explode when the Volcker induced recession reduced rates to 6% in a hurry.
      • Everyone wants to believe in fairy tales , and insurance companies promote them to sell product.
      • But the information and warnings were given to policyholders and they took the bait anyway to get something that was too good to be true.
      • Well, the chickens have come home to roost. Universal life has been a dangerous product for decades and consumers need to understand the risks.
      • Increasing mortality costs without the interest rate help spells disaster
  • 2017 0831 - WSJ - Life Insurer Faces Off Against African-American Church in Battle Over Rates As life insurers raise rates on old policies, customers are pushing back with lawsuits.: One trial involves ‘investor-owned’ policies at a church and allegations of unlawful use of racial data​., by Leslie Scism - [link]
  • 2018 0129 - WSJ - MetLife Says Pension Shortfall Will Prompt Financial Revisions: Insurer expects to increase its reserves by more than $500 million to deal with overdue benefits, By Leslie Scism  - [link]
  • 2018 0508 - WSJ - MetLife Will Take Over Pensions for 41,000 FedEx Retirees With about $6 billion in pension payments, deal is one of biggest for U.S. life insurers in recent years, By Leslie Scism - [link]
  • 2018 0919 - WSJ - Universal Life Insurance, a 1980s Sensation, Has Backfired: A long decline in interest rates caused premiums to soar when they were supposed to stay level, by Leslie Scism - [link]
  • 2020 0106 - WSJ - The Hottest Thing in Life Insurance Has Serious Risks: Indexed Universal Life insurance, tied to stock market gains, can generate sizable returns for investors. But Wall Street Journal reporter Leslie Scism explains how insurers could be underplaying serious risks to policyholders., by Leslie Scism - [AUDIO-link]
  • 2020 0107 - WSJ - It’s the Hottest Thing in Life Insurance. Are Buyers Aware of the Risks? Regulators worry insurers are underplaying the dangers of a product tied to the performance of the U.S. stock market, by Leslie Scism - [link]
    • One concern is that existing consumer materials “can lead to unrealistic expectations,” said Fred Andersen, an actuary with the Minnesota Department of Insurance who is a leader in the effort at the National Association of Insurance Commissioners.
    • Paul Graham, chief actuary with trade group American Council of Life Insurers, said the industry supports development of materials and disclosures that help consumers “make the right decisions,” though “we do have different views amongst our companies as to how to best accomplish that on rather complex IUL products.”
    • Some regulators and advisers fear indexed universal life will offer a repeat of what many consumers experienced with a policy known as basic universal life.
      • Those policies were a sensation in the 1980s when U.S. interest rates were in double digits.
  • 2022 1214 - WSJ - AIG to Officially Shut Unit That Failed in Financial Crisis Financial Products unit filing for bankruptcy in step toward final shutdown, by Leslie Scism - [link]
    • Appeared in the December 15, 2022, print edition as 'AIG to Close Unit That Failed in Financial Crisis'.
  • 2022 1224 - WSJ - Stock Selloff Hits Life Insurers’ Fastest-Growing Product Indexed universal-life policies grew with low rates and soaring markets, by Leslie Scism - [link]
    • The insider joke about indexed universal-life policies is that it takes an actuary, an attorney and maybe even an engineer to understand how the product works.
    • Some regulators worry that hypothetical projections of savings growth using these indexes are overly rosy and can lead to unrealistic consumer expectations.
    • If a projection proves faulty, a buyer could be stuck with an unaffordable insurance bill.

1995 1103 - The Press Democrat - New Look at Life Insurance Commissions, by Leslie Scism

1995 1222 - The Press Democrat - The Proposed New York Life Accord Criticized, by Leslie Scism

1996 1103 - Battle Creek Enquirer / WSJ - Insurance Relief on the Way, by Leslie Scism  - (Battle Creek, Michigan) Newspapers.com

  • 1997 1024 - WSJ - MONY Wins Dismissal of Suit Over 'Vanishing Premium' Policies, by Leslie Scism - [link]

 

1998 0123 - South Florida Sun Sentinel - Insurers curb churning but buyers still have stories, by Leslie Scism