LIAC - Life Insurance Committee - (A) - NAIC

  • 2023 - NAIC - LIAC - Fall Meeting - 112p
    • Agenda Item #4 - Hear a Presentation on Consumer Financial Literacy vs. Life Insurance and Annuities Illustrations —Birny Birnbaum (Center for Economic Justice—CEJ) and Brenda J. Cude (University of Georgia)
  • 2020 1110 - LIAC - NAIC - Presentation (p22-39) - CEJ, Birny Birnbaum - Re-Engineering Life and Annuity Illustrations and Disclosures - NAIC Life Insurance & Annuities (A) Committee - 124p
  • 2021 0811 - LIAC - NAIC - Summer National Meeting, Proceedings - 43p
    • (p8) - 2021 0811 -  LIIIWG Next Steps Summary Comment Chart
  • 2021 1216 - LIAC - NAIC - Executive (EX) Committee and Plenary - Attachment Four -
    • 4. The Life Insurance Online Guide (A) Working Group will:
      • A. Develop an online resource on life insurance, including the evaluation of existing content on the NAIC website, to be published digitally for the benefit of the public.
  • 2021 1231 - LIAC - NAIC - 2021 Fall National Meeting - 62p
    • 7. Consider Adoption of its 2022 Proposed Charges—Commissioner Glen Mulready (OK)
      • A. Discuss the Life Insurance Illustration Issues (A) Working Group “Chair Report”
        • CEJ - Birnbaum - He said this is the only effort that remains at the NAIC that is seeking to improve life insurance disclosures for consumers.
      • B. Discuss the Life Insurance Online Guide (A) Working Group
    • Mr. Aufenthie asked Mr. Birnbaum to explain his understanding of the difference between non-medical data and non-traditional data.
  • 2022 0407 - 2022-1, NAIC Proceedings -  LIAC - Life Insurance (A) Committee
    • 2. Adopted the Report of the Accelerated Underwriting (A) Working Group and the March 4 Draft Accelerated Underwriting in Life Insurance Educational Report
      • Mr. Birnbaum said he participated, along with Brendan Bridgeland (Center for Insurance Research—CIR) and Peter Kochenburger (University of Connecticut School of Law), and he did not think the Educational Paper was particularly good. He said it did not say anything other than watch out for unfair discrimination, which is so obvious and vague it is almost not worth mentioning.
      • 3. Heard a Federal Update on the Implications of the DOL Fiduciary Rule - Brooke Stringer (NAIC)
        • Patrick C. Reeder (American Council of Life Insurers—ACLI) said a fiduciary standard is not a bad standard, and it is an appropriate legal standard for situations where there is an ongoing relationship providing financial advice.
          • He said the problem with the DOL proposal is that it is a fiduciary-only approach, which would eliminate commission-based sales; i.e., the way that lower and mid-range clients buy products.
          • He said the DOL should recognize the changes that have taken place since 2017.
          • He said both the SEC’s Regulation Best Interest standard and the NAIC best interest revisions to the Suitability in Annuity Transactions Model Regulation (#275) provide a strong standard of care that is vigorously enforced.
          • He said state insurance regulators have a strong story to tell, and the DOL needs to hear from the NAIC.
        • Micah Hauptman (Consumer Federation of America—CFA) said there are gaps in the current regulatory framework. He said he does not believe consumers’ reasonable expectations are being met. He said the DOL should require a fiduciary duty, regardless of what products are being sold or how they are being sold. He said consumers all expect and deserve high quality advice without the taint of conflicts of interest.
      • 4. Adopted the Report of the Life Actuarial (A) Task Force
        • Mr. Birnbaum said indexed universal life (IUL) insurers are using unrealistic crediting rates with unrealistic expectations.
          • He said state insurance regulators tried to reign them in, most recently with Actuarial Guideline XLIX—The Application of the Life Illustrations Model Regulation to Policies With Index-Based Interest (AG 49) and then Actuarial Guideline XLIX-A—The Application of the Life Illustrations Model Regulation to Policies with Index-
            Based Interest to Policies Sold On or After December 14, 2020 (AG 49-A), but insurers continue to game the system and illustrate unrealistic and deceptive policy accumulations.
          • He said these discreet fixes are not solving the problem. He said the problem is the illustrations; they do not show risk. He said annuity illustrations requirements
            do not cap crediting rates, so insurers turn to bespoke indexes created by investment banks by data mining historical experience to falsely present potential future earnings. He said some illustrations show investment returns higher than the cost of a loan, which falsely suggest that it makes sense for people to borrow money to
            invest in life insurance products. He said insurance producers become de facto investment advisors. He said the Committee needs to address illustrations and engage experts in consumer disclosures to address these issues.
  • 2022 0811 - LIAC - NAIC - Agenda - 2p
    • 4. Discuss the Life Insurance Online Guide (A) Working Group - —Director Judith L. French (OH)
    • 6. Discuss Enhanced Cash Value Products—Director Judith L. French
  • 2022 0813 - EX - NAIC - Executive (EX) Committee and Plenary - Summer National Meeting - Attachment Two
    • 4. LATF - Life Actuarial (A) Task Force
      • In particular, the Task Force is considering asking the Committee to consider limited, targeted revisions to the Life Insurance Illustrations Model Regulation (#582) to address the need for the Task Force to make continual changes to the indexed universal life illustration actuarial guideline to address product features causing aggressive illustrations.
    • 6. LIOWG - Life Insurance Online Guide (A) Working Group focus on updating life insurance information on the NAIC website. State insurance regulators interested in participating in the Working Group can contact Jennifer Cook (NAIC).
  • 2022 1022 - Letter - LIAC - Life Insurance (A)  Committee - NAIC - re: Survey Inquiry about Enhanced Cash Value Offers on Universal Life Insurance Policies, From Judith French - 8p
    • “smoothness test", ULMR (Universal Life Model Regulation), NCOIL, Non-Forfeiture, 
    • NCOIL
    • 2022 1024 - Letter - LIAC - Life Insurance (A)  Committee - NAIC - re: Survey Inquiry about Enhanced Cash Value Offers on Universal Life Insurance Policies, From Judith French
  • 2023 0224 - LIAC - Life Insurance (A)  Committee - NAIC  ---  [BonkNote]  ---   19p (p8-
    • [Bonk: Not in NAIC Proceedings:
      • 10:30 - Birny - "Industry Pushback" , "....and can continue to use illustrations that Regulators have decided are inappropriate"
      • Ohio: it's our duty to 
      • Kim O'Brien - acceptance, Free-Look - Transfer of Consideration
      • 14:40 - [Bonk:
        • Ohio: - 
        • Fred Andersen - 
        • Birny Birnbaum - Third Version of that Obstruct the intent of the Illustration guideline deceptive and misleading action to change AG used product design  
        • Ohio - that is your perspective Market Conduct Reviews available to us in Ohio .. something that is misleading
        • 18:52 - 12:17pm - Chat Box - from Tomasz Serbinowski to everyone - Actuary, Utah Insurance Commission
          • "I guess it is implied.  If the Illustrations were fine, why would they need to be changed?"
        • Ohio - Motion to Adopt - 
    • Birny Birnbaum (Center for Economic Justice—CEJ) said that the term “sold” is still unclear and would allow for the continued use of illustrations that have been determined to be deceptive and abusive well after May 1.
      • He said not only will policies not be fully paid for until well after May 1, but also policies that were sold before May 1 will continue to be illustrated using the old methodology after May 1.
      • He suggested that it would be easier to administer and more protective of consumers to prohibit the use of the illustrations after May 1. Birnbaum said that insurers would not be required to go back and re-do any illustrations; it would simply require companies to say that they are no longer going to be using the illustration methodology that is deceptive and that state insurance regulators have decided is not appropriate.
      • Fred Andersen (Chair-MN) clarified that the revisions to AG 49-A arose out of a concern that there should be a level playing field between the illustrations of benchmark indices and non-benchmark indices, rather than the determination that the illustrations were misleading, per se.
        • Birnbaum said that even if state insurance regulators have not explicitly said the illustrations were misleading, the fact that the guideline has been revised twice is an implicit acknowledgment that insurers have continued to use product design to game the illustration guideline.
  • 2023 0323 - NAIC (LIAC) - 19p
    • 4. Heard a Presentation from the ACLI and the SOA on the Current State of Life Insurance
      • Presenters:
        • ACLI - Patrick C. Reeder, American Council of Life Insurers—ACLI) explained that the ACLI’s chief economist and vice president of research, Andrew Melnyk, will be giving a high-level presentation focused solely on life insurance and not the other products that life insurers sell.
        • SOA - Dale Hall, managing director of research at the SOA Research Institute, will give the second part of the presentation, focusing on mortality trends.
      • Birny Birnbaum (Center for Economic Justice—CEJ) said the ACLI Life Insurers Fact Book contains some interesting information that could complement the presentation.
        • He said in 1955, the U.S. population was around 165 million people, and there were 22 million individual life insurance policies in force.
        • He said in 2021, the population had doubled, but there were only 10 million individual insurance policies in force.
        • He said the number of group certificates during that same time frame went up from 2.2 million to more than 25 million, but that is still less than what was in force for group policies in 2004.
        • ⇒ Birnbaum said these statistics illustrate that insurance companies are marketing their products more as investments than death protection and focusing more on affluent consumers and higher face amount policies.
      • Brendan Bridgeland (Center for Insurance Research—CIR) asked if there have been any comparisons of product offerings and innovations and the decline in household life insurance ownership.
        • He asked whether there has been a focus on using life insurance products as investment planning for high-net-worth individuals at the same time as a decline in sales to lower and moderate-income families.
        • Patrick Reeder, ACLI - said that since 1955, there has been an increase in group life insurance, which is a part of the socioeconomic changes during which insurance became more readily accessible through the workplace. The ACLI agrees with Birnbaum and Bridgeland and wants to bring products to the consumers who need them. He said if the industry is not thoughtful about increasing access, it will continue to struggle, which is why they are putting time and energy into programs and initiatives to decrease barriers to producer licensing and being thoughtful as an industry. He said that Birnbaum and Bridgeland raise valid concerns, and they are the types of things the ACLI is looking at.
        • Andrew Melnyk said that the ACLI has not done a study like Bridgeland suggested of product offerings.
          • He said there have been some observations looking at ownership patterns in underserved communities, and there is some indication that ownership peaks at later ages.
          • Still, there has not been a lot of research done beyond that.
      • Brenda J. Cude (University of Georgia) said that the graph showing the percentage of families reporting any life insurance comes from data from the SCF, which notoriously does not do a good job of asking life insurance questions.
        • She said one example is a question regarding health insurance. The question asks if a person has health insurance; if they do not, it asks why.
          • She said there is no parallel question for life insurance.
        • She also said the survey asks about term and whole life insurance, but it is possible that a person has universal life or coverage through an employer and may answer no.
        • She said if there was a desire to make suggestions to the Federal Reserve Board (FRB) regarding ways to improve the questions they ask about life insurance in the SCF, she would be available to assist with that project.
          • She said she knows many researchers who would value that.
          • Melnyk said this was a comprehensive survey, but the depth could be better, so to the extent that the NAIC would want to work with the FRB to improve the survey, it would be willing to help.
            • He also mentioned that the ACLI uses a proprietary database to confirm the information from the SCF and has found that the information generally matches.
            • Birnbaum suggested that some of the granular data that the NAIC collects could be repurposed to inform some of the questions and research that was talked about.
  • 2023 0815 - LIAC - NAIC - 11p
    • Birnbaum reiterated his longstanding concerns regarding illustrations. He said the Life Actuarial (A) Task Force
      proposed and the Life Insurance and Annuities (A) Committee adopted AG 49-B as a short-term fix to deceptive indexed universal life (IUL) illustrations.

      • He said the Task Force and the Committee acknowledged that illustrations suffered from other problems.
      • He said the illustration model was developed and adopted before indexed products appeared in the marketplace.
      • He asked why there has not been any activity on life insurance and annuity illustrations.
  • Product Development Task Force – NAIC
    • 1989-2
    • 1989-4
    • 1990‐1A - Dec. 4, 1989.
      • LIAC - p449 - September 12, 1989
      • Report - p450-473 (4-27)
      • Sept. 11, 1989 - p464
    • 1990-2
      • LIAC - March 27, 1990 
    • 1990-4
    • 1991-1A
      • LIAC - Dec. 5, 1990 - p538
      • December 3, 1990 -  Report - p604-605
    • 1991-2A
      • LIAC
        • June 12, 1991 - p684
        • April 15, 1991 - p702
      • May 22, 1991 - p716
    • 1991-4
    • Life Actuarial (A) Task Force
      • Indexed Universal Life (IUL) Illustration (A) Subgroup
    • Life Insurance Buyers’ Guide Working Group - (2016-2018)
    • Life Insurance Online Guide (A) Working Group - (2018-?)
    • Retirement Security (A) Working Group (disbanded) (?-?)
  • 1979 1119/20 - Summary of Record Hearing Before the NAIC Task Force to Evaluate the Life Insurance Solicitation Regulation - Detroit, Michigan - November 19 and 20, 1979 (p719-735)
  • 1980 04 25 - Attached Issues and Options Paper: Prepared for the (C3) Task Force to Reevaluate the NAIC Model Life Insurance Solicitation Regulation (p735-738)
  • no date - I. WHY CHANGE THE CURRENT REGULATION? - (p739-) - Scheel?

--  Task Force to Evaluate the Life Insurance Solicitation Regulation

1980-2, NAIC Proceedings

  • Report on Evaluation of NAIC Model Life Insurance Solicitation Regulation - Jon Hanson (p683-

1980-2, NAIC Proc.

  • Replacement Issues Subgroup – NAIC
    • 1990's, New Jersey, Prudential, Multi-state Task Force
  • 1996-2, NAIC Proc.
    • Multistate Task Force Study of Life Insurance Marketing Practices (Attachment One-C)
    • Market Conduct Examiners Handbook - Chapter: Conducting Multistate Examinations (Attachment One-A)
  • LATF / TSAG
    • Life Working Group of the Life and Health Actuarial (Technical) Task Force  - 1996-1
    • Life and Health Actuarial (EX5) Task Force Directed to study reserve factor files .......... 85-I-552

The Life, A&H Technical Staff Actuarial Group is an informal group of state insurance department employees, most of whom are actuaries.

  • The group is not considered a task force, and no individuals are designed as "members."
  • The group began to function in June, 1981, when the National Association of Insurance Commissioners (NAIC) was reorganized and the former (C4) Life, Accident and Health Insurance Technical Subcommittee was discontinued.
  • Most of the individuals with the group have been members of the (C4) Technical Subcommittee.  (p452) 

1983-1, NAIC Proc. - Life Accident and Health Insurance Technical Staff Actuarial Group (TSAG)