Project – NAIC – Snippets – 2017

Project - NAIC - Snippets - 2017

2017-1, NAIC Proceedings - 2017 0207 - LIBGWG, Life Insurance Buyer's Guide Conference Call
- Ms. Neil expressed concern about some of the terminology in the ACLI guide, in particular the use of “cash value” to describe “permanent insurance,” but agreed there is likely some information that could inform the NAIC’s work.
  - <What is permanent insurance? Permanent (cash value) insurance provides lifelong protection as long as premiums are paid. - Excerpt from ACLI “What You Should Know About Buying Life Insurance.”>
  - Gary Sanders (National Association of Insurance and Financial Advisors—NAIFA) agreed that use of the term “cash value” was confusing."
  - Brian Fechtel (Breadwinners’ Insurance) ... said consumers do not understand the different types of insurance policies, noting that the guide should explain the different types and their advantages.
  - Birney Birnbaum (CEJ) ... said it is critical to include questions about product features and situations where consumers may need to pay more.

2017-2, NAIC Proceedings - 2017 0519 - LIAC, Life Insurance A Committee
- Michael Lovendusky (American Council of Life Insurers—ACLI) agreed with exploring having the NAIC as the destination for information on more sophisticated products.

2017-2, NAIC Proceedings - LIBG, Life Insurance Buyer's Guide
- 2017 0719 - Letter - Brenda Cude and Karroll Kitt
  - With that in mind, we started by making a list of basic information about life insurance that first-time buyers probably don’t know.
  - We based this not only on Brenda and Karrol’s years of experience teaching college students (who probably know as little as anyone about life insurance) but also on a search of the Internet.
  - We didn’t find any scholarly research on the topic but did find references to a number of industry sponsored surveys.
  - Brenda made the list that follows.
- [Bonk: Connect] - 1983-1, NAIC Proceedings
  - (p524) - Life Insurance [Solicitation] Disclosure Model Regulation
    - COMMENT: Since new subsection 5(c) contains requirements applicable to existing policies, the name of the regulation should be revised to indicate that it applies in more situations than just solicitation. (p524)

2017-3, NAIC Proceedings - 2017 0914, LIIIWG, Life Insurance Illustrations Working Group, Conference Call
- Richard Wicka (Chair) explained that state insurance departments do not give advice and should not be a place where consumers call with questions about how a specific policy works.

2017 1019 - Letter - AAA to NAIC (LIBGWG) - Life Insurance Buyer's Guide Working Group - Non-Guaranteed Elements Work Group of the American Academy of Actuaries - 2p
- We believe consumers would benefit from the inclusion of a discussion of NGEs in the buyer’s guide, and think the following points would be helpful:
  - Products with NGEs have the risk that costs could increase or benefits could decrease, subject to guaranteed limits stated in the policy.
  - Illustrations, if available during the purchasing process, can be useful tools to help consumers understand a range of possible product performance outcomes.
  - [Bonk: Performance / Benefits - Universal Life = Coverage Period, Protection Period, Duration, Term of Years in Force - Variable Life = Death Benefit Amount]

2017 1106 - NAIC - LIBWG - Life Insurance Buyer's Guide Working Group - Conference Call
- AAA - American Academy of Actuaries - "Because NGEs are likely to change, the ongoing performance of products with NGEs should be reviewed periodically after purchase to assess the impact of any NGE changes and consider actions that policyholders may wish to take (e.g., adjust premium payments or death benefits)."
- Brenda Cude (Consumer Representative / University of Georgia) said the issue of NGEs is interesting, but not something the average consumer would understand.
  - She did not think it was information that was appropriate for a short guide for first-time purchasers.
2017 1115 - Letter - ACLI to NAIC - LIBGWG, Life Insurance Buyer's Guide - ACLI Redlined Draft - 12p
- (p4) - Unlike a term policy, which can end after a specified number of years, permanent life insurance will continue to the policy’s maturity age so long as premiums are paid.
  - (Note that this isn’t exactly accurate for UL, where policies can continue as long as the cash value is sufficient to pay the policy charges. We may want to make that distinction.)
  - [Bonk: Last Paragraph without it lined out - (Note that this isn’t exactly accurate for UL, where policies can continue as long as the cash value is sufficient to pay the policy charges. We may want to make that distinction.)
  - [Bonk: Why did the ACLI line it out? The content is something that seems important to talk about]
  - Problem - As Long as You Pay the Premium
2017 1115 - Letter - AAA tot NAIC (LIBGWG) - Life Insurance Buyer's Working Group - American Academy of Actuaries - 2p
- Universal Life: This type of permanent policy offers some flexibility with premium payments.
  - While it is true these policies offer some flexibility, there are circumstances out of the policyholder’s control, such as decreasing interest credits or increasing policy charges, where additional premium payments may be required to keep the policy in force.
  - Universal life also allows for flexibility in policy benefits, not just premium payments.
2017-3, NAIC Proceedings - LIIIWG, Life Insurance Illustrations Working Group, Conference Call
- Mr. Reyna (NY) said the policy overview should help consumers understand how cash value accumulates and can work to their advantage over time.
- Mr. Wicka (Chair) acknowledged that the issue is complicated because a lot depends on how the policy is funded; however, just the knowledge that the policy has cash value could be helpful information for a consumer comparing a term policy to a whole life policy.
2017 1120-?? - NAIC - LIBG, Life Insurance Buyer's Guide Working Group - Brenda Cude to NAIC - re: 08-18-2017 Draft Life Insurance Buyer’s Guide - 5p - - 6p - [cmte_a_libg_wg_171120_karrol_kitt_brenda_cude_buyers_guide_comments]
- Comment [BJC2]:
  - Permanent insurance is a term used only by the industry – not by consumer educators.
  - We would prefer – Life insurance comes in two basic types: Term and whole life (also referred to as permanent insurance).

2017 1214 - NAIC - Letter - AAA to NAIC (LIBGWG) - Life Insurance Buyer's Guide Working Group, American Academy of Actuaries - NGEWG - Gabe Schiminovich - Re: Comments on the “10 Things You Should Know Before Purchasing Life Insurance” Exposure Draft"
- 9. Read Your Policy Carefully
  - Do premiums or benefits vary from year to year? How much do the benefits build up in the policy? What part of the premiums or benefits is not guaranteed? What is the effect of interest on money paid and received at different times on the policy? How will the timing of money paid and received affect interest earned in the policy?
  - These are all questions that you should be able to answer by reading your policy thoroughly. Your agent can help you understand things that are unclear