Project - NAIC - Snippets - 2016

  • 2016 0403, NAIC Proceedings (6-8), LIIIWG, Life Insurance Illustrations Working Group, Conference Call
    • Mr. Schwartzer reminded the Working Group that the Life Insurance Illustration Issues (A) Working Group came out of concerns raised when the Indexed Universal Life (IUL) Illustrations (A) Subgroup under the Life Actuarial (A) Task Force was working on guidance for IUL policy Illustrations that would result in consumers being better able to understand the product performance and interest variability of IUL products.
    • During the IUL Illustrations (A) Subgroup’s discussions, interested parties expressed a need to take a broader look at how all products are explained to consumers.
  • 2016 0403, NAIC Proceedings (6-8), LIIIWG, Life Insurance Illustrations Working Group, Conference Call  ---  [BonkNote] 
    • Michael Lovendusky, ACLI said that a major item that came out of the ACLI work group was the idea of doing consumer testing to inform any revisions to the narrative summary or policy summary—an idea that Ms. Cude also seemed to support.
    • Michael Lovendusky said the ACLI work group discussed whether the charge should include revising the Buyer’s Guide, which was a suggested addition to the charge from the American Academy of Actuaries (Academy).
      • -- While the ACLI work group did not oppose including the Buyer’s Guide, some on the work group thought that revisions to the Buyer’s Guide might work instead of revisions to the models.
      • However, Ms. Cude pointed out that the Buyer’s Guide has a different purpose from the policy summary and that revisions to one would not take care of the other because the Buyer’s Guide is designed to be educational, while the policy summary is informational and explains a particular policy.
    • Michael Lovendusky, ACLI ...said the ACLI work group thinks that most confusion for consumers involves complex products like universal life, and not Simple products like term life.
      • He said consumers are mostly confused about options, guarantees and riders.
      • The ACLI work group was considering asking the life insurance and Annuities (A) Committee to narrow the charge to look at only products with options, guarantees and riders, but Ms. Cude said she thinks that it is important to consider how the disclosures for all products could be improved.
  • 2016-2, NAIC Proceedings - LIIIWG, Life Insurance Illustrations Working Group
    • Ms. Winer asked if it would be useful to ask states whether they have received consumer complaints about the summaries.
      • Mr. Wicka said that it would be helpful to have that kind of information but that he is not sure it would be possible to track down complaints to that level of detail.
  • 2016-2, 0513 - NAIC Proceedings - LIIIWG, Life Insurance Illustrations Working Group
    • .....in particular, the impact consumer payment patterns have on the performance of the product.  
    • 1) additional information to be provided to consumers regarding how the timing of their payments impacts the product; and
    • 2) follow-up information to be provided to consumers at the time their payments go off-track so that consumers are aware of the impact to their policies.
    • [Bonk: "impact to their policies" ≈ Coverage Period-? Performance]
    • Richard Wicka (Chair) said the paper advocates for:
      • ...additional information to be provided to consumers regarding how the timing of their payments impacts the product; and
      • ...follow-up information to be provided to consumers at the time their payments go off-track so that consumers are aware of the impact to their policies.
      • [Bonk: Paper = 2016 0517 - LIIIWG - Assurity Resources - Consumer Issues Associated with Guaranteed Universal Life - NAIC - 11p]
  • 2016-3, NAIC Proceedings
    • She (Stegall) said the ad hoc group also discussed tasks to help it achieve its goal, including:
      • 1) gathering background on how the summaries are used and by whom; and
      • 2) reviewing narrative and policy summary examples for key factors highlighted in the Working Group’s charge, such as readability, understandability, design and format.
    • Ms. Stegall said the ad hoc group learned that, in most cases, the summaries are not intended as direct-to-consumer pieces and are not meant to help a consumer shop around for coverage; they are delivered at the point of sale.
    • She also said that, except from some whole life insurance and term life insurance products, the summaries are explained to the consumer by an agent or broker and really serve as a tool for financial advisors in highlighting the features of a product.
    • Ms. Stegall said that during its July 7 conference call, the ad hoc group reviewed and discussed whole life insurance and term life insurance sample summaries provided by the American Council of Life Insurers (ACLI). She said the ad hoc group specifically discussed the amount of information the samples included and how different that information was from company to company.
      • Ms. Stegall said the ad hoc group decided not to cross-compare the summaries, but focused instead on the idea of developing a one- to two-page policy overview document to accompany the summaries as a means to promote consumer readability and understandability of the policy information, due to the fact that the current summaries are not typically used in the marketplace to assist consumers with shopping for products.
  • 2016-3, NAIC Proceedings - LIIIWG, Life Insurance Illustrations Working Group
    • c. “Cost Information” Category   
    • Mr. Birnbaum disagreed and said including data that does not apply is confusing. 
    • d. “Policy Information” Category
      • The Working Group discussed the “policy information” category in the compilation document and the comments received. 
      • The compilation document listed “policy/product type,” “policy name,” “policy form number,” “policy term,” state of issue,” “death benefit,” “living benefit,” “guaranteed or non-guaranteed benefit,” “assumed policy effective date” and “policy may accumulate cash value (Y/N).” 
    •  Mr. Wicka suggested that work on the policy overview should start with term life policies before tackling the more complex whole and universal life products.
  • 2016-3 NAIC Proceedings - 2016 1020 - LIIIWG, Life Insurance Illustrations Working Group, Conference Call
    • Struck ... said that even if this is not included in term policies, the Working Group may want to consider listing elements if they may be in whole life policies or universal life policies, and include “not applicable to this policy.”
      • He suggested the information may be helpful to consumers who are comparing different types of policies from the same company.
        • Mr. Birnbaum said he understood what Mr. Struck was saying, but that he still preferred tailoring the policy overview document to the policy being described.
        • Ms. Micale said the ACLI agrees with Mr. Birnbaum on this point.
    • a. Purpose of Policy Overview Document
      • Birny Birnbaum (Center for Economic Justice—CEJ) suggested that the policy overview document should be a tool to aid consumers in comparing plans across companies, but not to choose between types of plans.
      • Mr. Wicka explained that he envisions the policy overview as being a high-level document including the basic elements of the plan. He said the policy overview should enhance consumer understanding, but not replace the buyer’s guide or the details in the illustrations.
      • Ms. Mealer said she agrees with Mr. Wicka’s description of the intended purpose of the policy overview document.
  • 2016 1211 - 2016-3v1, NAIC Proceedings - LIAC - LIBG- d. Life Insurance Buyer’s Guide (A) Working Group - Ms. Mealer ... said the Working Group, interested regulators and interested parties were asked to submit via email to NAIC staff any examples of life insurance guides. (p6-4)
  • 2016-4, NAIC Proceedings - LATF, Life Actuarial (A) Task Force
    • John Bruins, ACLI... noted that several companies have indicated receiving negative reactions from policyowners when their policy illustration changed.