Problem - Company

  • 1949 - SOA - Some Actuarial Observations on Agency Management Problems, by Charles F. B. Richardson, Society of Actuaries - 46p
  • 1977 - SOA - Effective Product Management, Society of Actuaries - 12p
  • Mr. Montgomery asked how companies would control brokers who were selling insurance.
    • 1994-3, NAIC Proceedings
  • Mr. Wright said the Society of Actuaries report referred to the fact that companies said they had no control over what agents did.
    • 1994-4, NAIC Proceedings
    • 1991-1992 - SOA - Final Report* of the Task Force for Research on Life Insurance Sales Illustrations, Society of Actuaries - 142p
  • My next comment relates to the vanishing premium "payback."
  • I guess I'd have to say I'm disappointed that companies haven't defended themselves more vigorously in this whole situation.
    • Maybe the reason is that their agents didn't do the proper job at the point of sale.
    • But if the agent did, and if the agents have a good file, and they've been following up since the point of sale/issue and have communicated properly to their clients the impact of interest rate changes on at least an annual basis, I don't think we would have this problem.
  • I found it fascinating that the agent in the Crown Life case got $40 million for mental anguish.

--  Kevin A. Marti, vice president of administration and chief actuary for Westfield Life Insurance Company

1995 - SOA - Sales Illustrations, Society of Actuaries - 14p

  • 1993 0525 - GOV (Senate) - When Will Policyholders Be Given The Truth About Life Insurance?, Howard Metzenbaum (D-OH)  ---  [BonkNote]
    • (p15) - Jerry Keating - I began my career with John Hancock Mutual Life Insurance Co. in 1965.
      • From 1982 to June 12, 1990, I was the staff manager in the Sioux City, LA, office.
      • My job during this period was to office train and field train new and veteran agents.
    • (p15) - Mr. Keating: I am still employed by the John Hancock ...
      • I would like to know exactly, what guarantees do I have from this committee that I will not be harassed?
    • (p15) - Senator Metzenbaum. We cannot guarantee any position.
      • But I would guess that my colleague here from South Carolina and this Senator and I think every member of this Senate would be so outraged at John Hancock if they took any action against you for testifying before a Senate committee that they would find our wrath unlimited and that we would take every step possible to protect your position.
      • I think the Senator from South Carolina, with whom I disagree on some issues, but I think he would agree that no witness ought to ever be penalized for appearing before a Senate committee.
        • And this gentleman is asking whether or not—what guarantee does he have that he will not be terminated from his employment just by reason of his appearing here. Do I reflect the Senator's view as well?
    • (p15) - Senator Thurmond. Yes, you do.
    • (p15) - Senator Metzenbaum. Thank you. Mr. Keating, please proceed.
    • (p16) - Mr. Keating: I began my career with John Hancock Mutual Life Insurance Co.in 1965.
      • From 1982 to June 12, 1990, I was the staff manager in the Sioux City, LA, office.
      • During the first years of my employment, everything that I heard from the John Hancock home office turned out to be true, correct, just like we were told.
    • Sometime in the early 1980's, we began selling a product called variable life insurance.
      • Every day we received information on the home office computer with glowing account facts on how much these accounts were earning—25, 30, and 35 percent interest.
      • This information was shown to new prospects to get them to buy variable life insurance.
      • Also, these contracts required no premiums after 5 years.
      • We sold these variable life policies by the hundreds.
      • In fact, our Sioux City office was one of the leaders in the company.
    • (p17) - Several times the other people in our office and I went to meetings where we were told nothing about the risks involved in buying this product, just how much the insured would make.
    • I personally wrote two VLI contracts on Ivan Ammar in Randolf, NE.
      • He is the minister at the Lutheran Church there.
        • He bought these policies for his retirement.
      • The computer sheets showing the amount of his retirement benefits were fantastic.
      • He paid for years, but had to drop his policies when he found out he would have to continue paying premiums after retirement.
    • ...another. Jeanette Keating, my wife, another. Holly Keating, my daughter, another. Jerry Eike, my son-in-law, another. Terry Eike, my daughter, another. Larry Eike, Jerry's brother, another.
    • (p18) - The training we received was sales training only.
      • The home office people who came to the Sioux City, lA, office said: Don't try to become a Ph.D. in variable life insurance; just learn enough to sell it and go.
      • This is what they told the whole office, and this was how I trained any new men that I hired:
        • Just sell it; do not worry about it.
      • Just before I got sick in 1990, the company seemed to change.
        • They started telling us about the risks.
    • This statement is only the tip of the problem.
      • There are hundred and hundreds more.
      • And, Senator Metzenbaum, I would like to tell you, sir, if you do not get the Government to do something about this, you haven't seen nothing yet.