Q: What Do Agents Say to Consumers?

  • The agent, as a result of not understanding the illustration, may misrepresent the product to the consumer.

—  Judy Faucett

1992 – SOA – Life Insurance Sales Illustrations, Society of Actuaries – 16p

  • John Montgomery [California] asked how companies would control brokers who were selling insurance.

1994-3, NAIC Proceedings

  • Bob Wright said the Society of Actuaries report referred to the fact that companies said they had no control over what agents did.
    • [Bonk: Bob Wright = Chair of the LDWG – Life Disclosure Working Group – (A) – NAIC  —  [BonkNote]]

1994-4, NAIC Proceedings

1991-1992 – SOA – Final Report* of the Task Force for Research on Life Insurance Sales Illustrations, Society of Actuaries  —  [BonkNote]  —  142p

  • Some of the comments that we have heard from regulators about the illustration situation suggest feelings of, if not outright despair, growing frustration.
    • A couple of them spoke sadly of the futility of regulating an illustration when the real issues involve the agent or the company.
    • Larry Gorski of the Illinois department mentioned that in states that do not regulate advertising or promotional materials, misleading statements can be rampant in those materials even if the illustrations are made pure.

 —  Benjamin J. Bock,  Transamerica Occidental

1992 – SOA – Life Insurance Sales Illustrations, Society of Actuaries – 16p

  • The agent said that Universal Life policy premiums would stay the same, but I came to realize that this is not true of our policies.
  • …what bothers me is that I am afraid that this same misleading information may be the basis of my children’s and grandchildren’s … planning…

—  Statement of Gloria Darleen Newberry, Policyholder

1993 0525 – GOV (Senate) – When Will Policyholders Be Given The Truth About Life Insurance?, Howard Metzenbaum (D-OH)  —  [BonkNote]

  • 1998 0717 – Tampa Bay Times – Insurers Accused of Bilking Recruits – [link]
    • The problem, investigators and prosecutors say, is that customers did not read the pamphlets, simply taking the word of persuasive sales agents.
    • “American Fidelity obviously is not in a position to know exactly what is said at each point-of-sale,” the companies’ lawyers argued in motions to prevent a temporary injunction.