Birny Birnbaum - (CEJ): 

• I think this can be done in a fairly transparent way.  The same way that you can do a …even easier than what you can do with a Surrender Charge.
• So, for example, if there's a "Cost of Insurance charge" what's the initial "Cost of Insurance Charge" and can it change and are there any limits to what the changes can be.  That's useful information for a consumer.
• If I look and see that … here's what the "Cost of Insurance" is, but this fee can go up without limit … that's useful information compared to a product where the "Cost of Insurance" can go up, but it's capped at 2 times the initial charge for example.
  • <Bonk: It sounds like he is talking about a Non-Guaranteed Premium Policy/ Indeterminate Premium Policy and not a Universal Life Policy.>

Birny Birnbaum - (CEJ):

• So, if the information that you provide here is the initial cost of insurance, that is what percent of the cash value and it can increase up to 3% of the cash value.
  •  <Bonk:  This wording doesn't make sense to me.  Cost is Insurance (COI) would be based on the NAAR and not the Cash Value>
• Then that is information that can be used to compare across companies…. 
• So, the comments that Mr. Lovendusky made were basically contradictory.
  • On the one hand, he talked about how complicated this stuff is..
  • but at the end he then said, well, we could give the initial and then what the cap is. 
  • <Bonk:  Can't this information already be provided...if Agents or Consumers request it? -For Example, Walker v LSW (Illustration Optional Report), -
• And that is exactly what CEJ had suggested for this particular provision.
  • Which is what am I starting with and what can this thing go up to.
    • That is in fact useful information to the consumer.  What am I looking for ….
• And this will not only, not create litigation, because this is what's in the policy form, but it will prevent litigation, because it will be much more transparent to the consumer… what the possibility is that the consumer is facing. 
• So, I can admit that I am completely baffled why Industry, which has been sued over this issue would not try to make this much more transparent up front to avoid the problems it is now encountering.
  • <Bonk:  What issues does Birney think the Industry is being sued over?>
  • <Bonk:  What problem does Birny think are being encountered?>

2019 0917 - NAIC Life Insurance Illustrations Working Group (LIIIWG) Conference Call <Bonk>