Life Insurance Buyers’ Guide Working Group (LIBGWG) - Snippets of NAIC Proceedings
He <Brian Fetchel (Breadwinners Insurance)> said consumers don’t understand the different types of insurance policies …
| 2/7/2017 LIBGWG CC Proc. |
2015 - Spring
Appointed a New Working Group to Revise the Life Insurance Buyer’s Guide
Ms. Matthews said the Committee has a 2015 charge to review and consider revisions to the Life Insurance Buyer’s Guide
(Buyer’s Guide) in conjunction with the Life Insurance Disclosure Model Regulation (#580). She noted that the Buyer’s
Guide is woefully outdated. Commissioner McPeak noted the importance of having an up-to-date Buyer’s Guide, which
would include provisions related to accelerated death benefits. She also suggested that the Committee consider appointing a
new working group to work on the charge.
Birny Birnbaum (Center for Economic Justice—CEJ) expressed support for appointing the working group. He suggested that,
as the working group works to complete the charge, it keep in mind that the method of distributing the Buyer’s Guide is just
as important as its content. Mr. Birnbaum said it is also important that the working group identify the particular target
audience for the Buyer’s Guide; i.e., individuals purchasing life insurance products as an investment vehicle versus
individuals purchasing life insurance products for their death benefits. He also suggested that the working group consider the
work of the Market Regulation and Consumer Affairs (D) Committee related to consumer disclosure best practices.
Commissioner Gerhart made a motion, seconded by Commissioner McCarty, to appoint a new working group to work on
revising the Buyer’s Guide in conjunction with Model #580. The motion passed unanimously.
2016 FALL
d. Life Insurance Buyer’s Guide (A) Working Group
Ms. Mealer said the Life Insurance Buyer’s Guide (A) Working Group held an organizing conference call Nov. 29. She said
the Working Group discussed whether the existing buyer’s guide provides a good starting point and quickly realized that the
current guide is in need of a comprehensive overhaul. She said the Working Group, interested regulators and interested
parties were asked to submit via email to NAIC staff any examples of life insurance guides that might be helpful for the
Working Group to review for inspiration on format and content.
Ms. Froment made a motion, seconded by Superintendent Dwyer to adopt the report of the Life Insurance Buyer’s Guide (A)
Working Group, including its Nov. 29 minutes (Attachment Eight). The motion passed unanimously.
7. Discussed its New Working Groups
Commissioner Gerhart said he is soliciting volunteers for the Committee’s three new working groups: 1) the Annuity
Disclosure (A) Working Group, which is working on illustration standards; 2) the Preventing Abuses in Life Insurance and
Annuities (A) Working Group, which is working on updating the Model Regulation on the Use of Senior-Specific
Certifications and Professional Designations in the Sale of Life Insurance and Annuities (#278), the bulletin and consumer
alert; and 3) the Life Insurance Buyer’s Guide (A) Working Group, which is working on revising the buyer’s guide.
He said the Annuity Disclosure (A) Working Group has volunteers from Iowa, Idaho, Kansas and Missouri. Iowa has agreed
to chair the Working Group, but a few more members would be ideal. The Preventing Abuses in Life Insurance and
Annuities (A) Working Group has volunteers from Colorado, Idaho, Ohio, Oregon, Tennessee and Wisconsin, but needs a
chair. He said Missouri is the only member of the Life Insurance Buyer’s Guide (A) Working Group at this time, noting that
it needs additional members and a chair. Commissioner Gerhart asked for regulators to email Jennifer Cook (NAIC) by the
end of the week to volunteer. He said he would appoint regulators next week to fill the vacancies. Commissioner Hudgens
said Georgia would volunteer to participate on the Life Insurance Buyer’s Guide (A) Working Group.
2017 - Spring
5. Adopted the Report of the Life Insurance Buyer’s Guide (A) Working Group
Ms. Mealer said the Life Insurance Buyer’s Guide (A) Working Group met four times since the 2016 Fall National Meeting:
March 27, March 13, Feb. 27 and Feb. 7. She explained that the Working Group discussed the merits of removing the
Buyer’s Guide as an appendix to the Life Insurance Disclosure Model Regulation (#580). She said the Working Group
discussed, from an efficiency standpoint, that it makes sense to separate the process of updating the Buyer’s Guide from the
process required to revise a model. The Working Group discussed that there is precedent for removing the Life Insurance
Buyer’s Guide because the Annuity Buyer’s Guides were removed from Model #245 in 2011. The Working Group agreed to
recommend to the Life Insurance and Annuities (A) Committee a model law review request to remove the Buyer’s Guide as
an appendix to Model #580.
Ms. Mealer explained that the Working Group does not envision removing the Buyer’s Guide from the Committee process
and contemplates future revisions being accomplished pursuant to a charge, adopted by the Committee and, ultimately, the
NAIC membership. Ms. Mealer said besides removing the appendix, no additional changes are required to be made to Model
#580, as the definition of “Buyer’s Guide” in Model #580 refers to the “NAIC adopted Buyer’s Guide or language approved
by the Commissioner.” Mr. Regalbuto asked whether by adopting the MLR request, there would be a void because there
would not be an appendix where the NAIC Buyer’s Guide was located. Ms. Matthews explained that once the model law
review request is approved, the Working Group is free to put pen to paper and draft a revised Buyer’s Guide. She said at the
same time the revised Buyer’s Guide is brought to the Life Insurance and Annuities (A) Committee and then the Executive
(EX) Committee and Plenary for adoption, so would the revised Model #580 with the appendix removed. In this way, the
revised Buyer’s Guide becomes the NAIC-adopted Buyer’s Guide at the same time it is removed from Model #580.
Ms. Mealer said the Working Group also discussed possible outlines and formats for a revised Buyer’s Guide. She said the
Buyer’s Guide is currently available in paper and electronically on the NAIC website to be printed out. She said the Working
Group discussed whether it is desirable to have an electronic buyer’s guide—whether that is a totally electronic web page or a
Word document with internal hyperlinks. She said the Working Group concluded that it should start with a Word document
(that could have some internal linking features) but should be able to be printed out as well. She said that the Working Group
discussed that once that kind of document is completed and the content established, the Working Group could look into
creating a wholly online resource. Ms. Mealer said the Working Group would like guidance from the Committee on
continuing with this approach.
Ms. Mealer said the Working Group also discussed what content should be included in a revised Buyer’s Guide—whether the
Buyer’s Guide, in addition to discussing the types of life insurance available, should also address replacements or viatical or
life settlements. She said this is another area about in the Working Group is seeking guidance from the Committee.
Mr. Regalbuto made a motion, seconded by Commissioner Ommen, to adopt report of the Life Insurance Buyer’s Guide (A)
Working Group, including its March 27 (Attachment Four), March 13 (Attachment Five), Feb. 27(Attachment Six) and Feb.
7 (Attachment Seven) minutes. The motion passed.
Director Ramge asked, due to time constraints, that Committee members, interested state insurance regulators and interested
parties email Jennifer Cook (NAIC) with suggestions with respect to the areas the Working Group is asking for feedback:
1)whether the Working Group should continue to work on a Word document with possible internal hyperlinks as opposed to
an electronic-only web page; and 2) whether the Buyer’s Guide should address additional topics such as replacements or
viatical settlements.