ThinkAdvisor

  • AIG’s defenders have long asserted that the company’s troubles were not insurance-based; they were the work of what amounted to a rogue financial products office in London that vastly overextended its reach on trafficking toxic debt.
    • The fundamentals of the company, or so the conventional wisdom goes, were solid, especially on its insurance operations.
      • ⇒ … the conventional wisdom on AIG is wrong.

2012 0213 – ThinkAdvisor – Fallout (AIG), By Arthur D. Postal – [link]

  • 2024 0102 – ThinkAdvisor – Regulators lukewarm on illustrations rewrite in 2024, by John Hilton – [link]
    • “Misleading and deceptive practices” is the one barrier regulators could do something about, they say. It starts with addressing misleading illustrations.
    • Birny Birnbaum and Brenda J. Cude urged regulators to tackle that barrier by updating the life insurance illustration regulation
    • Birnbaum provided regulators one sample illustration of a product showing a 20% return as a “worst-case scenario.” – <WishList>
    • NAIC regulators are candid about not wanting to reopen the overall illustrations model because it would likely be a years-long process. The current illustrations regulation was adopted in 1997 after a similar process. And that was before indexed universal life insurance even existed.
    • With the exception of Philip Barlow, associate commissioner for insurance with the District of Columbia Department of Insurance, Securities and Banking, none of the regulators sought further information from Birnbaum or Cude.
      • “Looking at some of those sample illustrations they seem to be things that are not plausible for somebody who has any level of financial literacy,” Barlow said. “That they can be used with people seems to be a big problem.”
      • Barlow asked what the NAIC could do to address illustrations but the question went unanswered.
    • It is long overdue to update the life illustrations model regulation, agreed Sheryl Moore, CEO of Wink, Inc. and Moore Market Intelligence.
      • “It is time to nip the illustration gamesmanship by the bud,” she said. “Indexed life didn’t exist when the life insurance illustration model regulation was adopted by the states. It’s time to reopen the model reg, and ensure that all cash value life insurance products are being illustrated in a manner that is helpful in ensuring that the consumer understands how the product truly works.”

2000s

  • 2002 0618 – ThinkAdvisor – ACLI: Federal Oversight Would Be Less Confusing, By Steven Brostoff – [link]
  • 2002 0804 – ThinkAdvisor – Class Action Suits Have Weakened State Regulation, ACLI Tells Congress, By Steven Brostoff – [link]
  • 2004 0712 – ThinkAdvisor – American-Amicable Reports Military Allotment Woes, by Staff Writer – [link]
  • 2004 1006 – ThinkAdvisor – UL Policy Design Objectives, By Staff Writer – [link]
  • 2006 – ThinkAdvisor – The Life Long Learner, by By Staff Writer – [link]
    • The Task Force for the Future, an industry-wide coalition charged with identifying and solving major challenges facing the life insurance industry, found that the average age for life insurance agents exceeds 55 years.
  • 2007 0624 – ThinkAdvisor – New Disclosure Documents Seen Aiding Annuity Purchasers, By Jim Connolly – [link]
  • 2008 0420 – ThinkAdvisor – Industry Protests ‘Dateline’ Broadcast On Annuity Sales Practices To Seniors, By Trevor Thomas – [link]
  • 2008 0924 – ThinkAdvisor – Dinallo Reports Heavy AIG Call Volume, By Jim Connolly – [link]
  • 2008 1101 – ThinkAdvisor – Smoke and Mirrors?, By Marlene Y. Satter – [link]
  • 2009 0324 – ThinkAdvisor – Geithner To Ask For More Powers By Arthur D. Postal – [link]
    • AIG’s problems “highlight the need for a resolution authority with the power to manage the orderly restructuring of a large, complex, non-bank financial institution that poses a threat to the stability of our financial system,” Geithner said.

2010s

  • 2010 1019 – ThinkAdvisor – IMSA Becomes CEFLI, by Arthur Postal – [link]
  • 2012 0213 – ThinkAdvisor – Fallout (AIG), By Arthur D. Postal – [link]
    • He said that he has observed over the years that he has been in Congress, that the insurance regulatory regime in this country is “out of date and inefficient, and the heart of that system is the NAIC.” 
    • Royce requested the review in a letter delivered today to Michael McRaith, FIO director.  <WishList>
  • 2012 0310 – ThinkAdvisor – Leap Systems, LLC, Announces Organizational Changes – [link]
  • 2012 0801 – ThinkAdvisor – FSOC Warns About Low Interest Rate Environment Ramifications, By Elizabeth D. Festa – [link]
  • 2012 1106 – ThinkAdvisor – The Complete ELNY Saga, By Bill Coffin, Elizabeth D. Festa, Warren S. Hersch, Michael K. Stanley, Shawn Moynihan – [link]
  • 2012 1116 – ThinkAdvisor – 11 ways to sell IUL more ethically, By Bill Coffin – [link]
    • Indexed universal life sales are the fastest-growing segment of the life industry thanks to the protection they provide against market downturns while still giving policyholders the opportunity to invest profitably. But IUL is a complicated product, and those who sell it face the looming possibility of a federal fiduciary standard that would open agents and brokers to serious legal liabilities. This, at a time when clients already have low expectations of ethical behavior from their advisors and agents.
    • To manage the risk of suitability missteps, Richard Weber, president of The Ethical Edge, gave NAILBA 31 attendees a list of best practices brokerage general agencies can adopt to become better advocates for their clients and to manage expectations realistically.
  • 2013 0917 – ThinkAdvisor – ACLI calls Lawsky’s letter on reserves ‘irresponsible’, By Elizabeth D. Festa – [link]
  • 2013 1004 – ThinkAdvisor – Rep. Royce again questions NAIC’s authority – [Ed Royce (R-CA)], By Arthur D. Postal – [link]
  • 2014 0530 – ThinkAdvisor – Wade Pfau, Practical Academic: The 2014 IA 25 Profile, by By Savita Iyer-Ahrestani – [link]
  • 2015 0722 – ThinkAdvisor – Misrepresentation and ignorance: A dangerous blend for ethics, By Brian Anderson – [link]
  • 2017 0808 – ThinkAdvisor.com – Annuity Rules Should Apply to Investment-Type Life Products: Consumer Reps, By Allison Bell – [link]
  • 2017 0818 – ThinkAdvisor – Your 5 Best Arguments for Life Insurance (Besides the Death Benefit), By Ed Slott – [link]
    1. IRAs are bad assets; life insurance is a good asset.
    2. Life insurance is an investment, not an expense.
    3. Life insurance has lifetime benefits.
    4. You get more control with life insurance.
    5. Leverage is a powerful tool for wealth creation.
  • 2018 1004 – ThinkAdvisor – Muddy Waters Shorts Manulife on Risks in Universal Life Trial, By Erik Schatzker, Katherine Chiglinsky and Ivan Levingston – [link]
  • 2019 0222 – ThinkAdvisor – New York Financial Superintendent Lacewell Warns of Hidden Costs in Universal Life Policies, By Elizabeth Festa – [link]
    • 2019 0221 – New York – Department of Financial Services – Consumer Alert – Acting DFS Superintendent Lacewell Issues Consumer Alert Regarding Universal Life Policies: DFS Urges New Yorkers to Carefully Review Their Policies and All Information Provided by Their Insurer- [link]
  • 2019 1213 – ThinkAdvisor – Whole Life Insurance Critics Aren’t Serious, By David Lewis – [link]

2020s

  • 2020 0714 – ThinkAdvisor – Indexed Universal Life Illustration Fight Continues to Boil, By Allison Bell – [link]
  • 2022 0512 – ThinkAdvisor – Treasury Secretary Worries About Leverage at Life Insurers, by Allison Bell – [link]
    • [Bonk: 2022 – FRB – Financial Stability Report – 86p]
  • 2022 0715 – ThinkAdvisor – Some State Lawmakers Troubled by Private Equity’s Growing Life & Annuity Stake, By Allison Bell – [link]
  • 2022 0603 – ThinkAdvisor – NAIC Rejects Need for Federal Help With Private Equity-Owned Life Insurers, By Allison Bell – [link]
  • 2022 0512 – ThinkAdvisor – Treasury Secretary Worries About Leverage at Life Insurers, by Allison Bell – [link]
  • 2023 0323 – ThinkAdvisor.com – Advisor Tells Regulators That Life Illustrations Are Just Too Simple, By Allison Bell – [link]
    • 2023 0321 – NAIC/Consumer Liaison Committee – 6p
      • (p3-4) – Richard Weber (Life Insurance Consumer Advocacy Center-LICAC)
      • 5. Heard a Presentation Calling Attention to the Dilemma of Current Assumption Policy Illustrations
  • 2023 1019 – ThinkAdvisor.com – PHL Variable Sues Its Insurers for Help With Defense Costs, By Allison Bell – [link]
  • 2023 1110 – ThinkAdvisor – The 2 Biggest Fights Brewing Over DOL’s New Fiduciary Rule, By Melanie Waddell – [link]
  • 2023 1130 – ThinkAdvisor – Consumer Reps Ask States to Change Annuities’ Faces, By Allison Bell – [link]
    • Illustrations, 
    • Birny Birnbaum, Brenda Cude, Bobby Samuelson, Larry Rybka
  • 2023 1130 – ThinkAdvisor – How Life Insurance Policy Reviews Trip Up Fiduciary Advisors, By John Manganaro
    • FPA Report
      • ? – 2020 04 – FPA – Providing Life Insurance Advice under the New CFP Board Practice Standards, By Paul H. Auslander, V. Raymond Ferrara, and Barry D. Flagg – [link]
    • Policy Illustrations Are Particularly Fraught
    • “The NAIC Life Insurance Illustrations Model Regulation generally ignores these risks,” the authors warn, “instead permitting both mortality improvements and operating gains (albeit with disclosures in footnotes not often read by planners or clients), as well as a wide range of interest/earnings assumptions that have too often proven to be unreasonable.”
    • CFP – cfp.net/-/media/files/cfp-board/standards-and-ethics/compliance-resources/naic-comparison-guide.pdf
  • 2024 0102 – ThinkAdvisor – Regulators Lukewarm on Illustrations Rewrite in 2024, by John Hilton – [link]
  • 2024 0111 – ThinkAdvisor –  7 Threats Life and Annuity Commenters See Lurking in DOL Fiduciary Rule Draft, By Allison Bell – [link]
  • 2024 0408 – ThinkAdvisor.com – Clients With Universal Life Need Performance Updates: Elan Moas, By Allison Bell – [link]
    • LinkedIn – Sheryl J. Moore – [link]
      • Comment: Philip Polkinghorn – If you adjust premium at each change in credited rates you should not crash. Insurance is for low frequency and high severity events. If only 10% of houses burned down, would you not insure your house?
      • Christopher Harp – The volume of conversation on this subject makes me want to avoid this space completely.
      • 2024 0408 – WinkIntel – And Yes, Life Insurance Illustrations are Broken for All Types of Life Insurance, by Sheryl J. Moore  —   [BonkNote]   —  [link]
  • 2024 0425 – ThinkAdvisor.com – DOL Fiduciary Rule Add-On Could Boost Annuity Distributors’ Clout, By Allison Bell – [link]
  • 2024 0522 – ThinkAdvisor.com – Connecticut Puts Phoenix Life and Annuity Issuer in Rehab, By Allison Bell – [link]
    • Connecticut Insurance Commissioner Andrew Mais has received approval from a state court in Hartford to put PHL Variable Insurance Co. – the insurer that once wrote the Phoenix Companies’ variable insurance policies and variable annuity contracts – in rehabilitation.
  • 2024 0813 – ThinkAdvisor.com – Life and Annuity Illustrations Confuse Clients, Advisor Tells Regulators, By Allison Bell – [link]
    • Richard Weber, the principal at The Ethical Edge, a life insurance advisory firm in Pleasant Hill, California, is making that case to the National Association of Insurance Commissioners this week.
  • 2025 1219 – ThinkAdvisor.com – 5 Insurers That Sold the Most Indexed Universal Life Policies in Q3 – Slideshow, By Allison Bell – [link]
    • Life insurance professionals frequently clash over IUL policies on LinkedIn and elsewhere because of concerns that, even though the issuers almost always make good on the terms of the policies, some agents give consumers unrealistic ideas about how the products might work, partly because the agents themselves have a hard time understanding how they might perform.
    • In some cases, people like NASCAR racer Kyle Busch who used borrowed money to pay for IUL policies have suffered enormous losses due to gaps between how they thought the policies would behave and how the policies actually behaved.
    • Slideshow – Credit: Chris Nicholls/Touchpoint Markets
      1. National Life Group – IUL sales, Q3 2025: $114 million – Change from Q3 2024: -7.8%

      2. Transamerica – IUL sales, Q3 2025: $95 million – Change from Q3 2024: +22%

      3. Pacific Life – IUL sales, Q3 2025: $68 million – Change from Q3 2024: -5.9%

      4. John Hancock – IUL sales, Q3 2025: $67 million – Change from Q3 2024: +57%

      5. Nationwide – IUL sales, Q3 2025: $59 million – Change from Q3 2024: +8% –

 

  • With U.S.Treasury Secretary Tim Geithner due to address the House Financial Services Committee, July 25, on the annual report of the Financial Stability Oversight Council (FSOC), a Dodd-Frank Act requirement, expect some cautionary words about the health of the insurance industry and concerns surrounding the euro.
  • The low interest rate environment poses a significant challenge for life insurers with sizable blocks of liabilities with promised interest rate guarantees found in annuities or universal life insurance policies, the recently-released annual report written by FSOC members warns.
  • “The low interest rate environment has proved challenging for life insurers to generate sufficient investment returns to meet high guaranteed benefits promised in prior years,” the FSOC report stated.

2012 0801 – ThinkAdvisor – FSOC Warns About Low Interest Rate Environment Ramifications, By Elizabeth D. Festa – [link]

  • Brenda Cude, a NAIC-funded consumer representative and a professor with the University of Georgia in Athens, said the project is important because its developers went right to consumers to ask them what they felt was important.
    • Consumer focus groups gave developers a better sense of what consumers read and what they need, she added. The overall opinion of consumers that assessed the work was that it is readable, she noted.
  • “I think it is admirable that an industry group says, ‘We need help doing a better job,'” Cude said.
    • There are different disclosure templates for variable and fixed annuities, she noted. “This is a requirement, and they’re saying, ‘Why shouldn’t we do the best that we can?'” she added.
  • “In many ways the insurance area is behind the curve, compared with other areas in the financial services industry in finding more effective ways of disclosure,” and this offers a way to catch up, Cude said.

2007 0624 – ThinkAdvisor – New Disclosure Documents Seen Aiding Annuity Purchasers, By Jim Connolly – [link]