William Tozer

  • AAA - American Academy of Actuaries
  • ACLI - American Council of Life Insurers
  • Kentucky Central Life
  • 1987 - chairs the Subcommittee on Dividends and Other Non-Guaranteed Elements of the Life Committee of the IASB - [International Accounting Standards Board]

Times have changed.

--  William T. Tozer, ACLI

1981 - SOA - Individual Life Insurance Cost Disclosure Issues, Society of Actuaries - 22p

  • In the January 1987 issue of Insurance Forum Joseph Belth makes the statement :
    • In my opinion, life insurance sales illustrations are out of control.
    • Furthermore, I am not aware of any significant attempts by any insurance organization or by the actuarial profession to deal with the problem.

1987 01 - SOA - Non-Guaranteed Promises: A New Standard of Practice, by William T. Tozer, The Actuarial Update, Society of Actuaries -  8p

⇒  William T. Tozer chairs the Subcommittee on Dividends and Other Non-Guaranteed Elements of the Life Committee of the IASB - [International Accounting Standards Board]

  • This approach treats flexible life as a continuous level premium, level death benefit whole life policy.
  • This is the type of program that most people think about when life insurance is discussed.
  • Second, this approach emphasizes that the payments made by the applicant are the premiums --not the expense loads or monthly mortality charges. 

--  William T. Tozer, ACLI

1981 - SOA - Individual Life Insurance Cost Disclosure Issues, Society of Actuaries - 22p

  • 1981 - SOA - Individual Life Insurance Cost Disclosure Issues, Society of Actuaries - 22p
  • 1984 - SOA - Dividend Philosophy, Society of Actuaries - 14p
  • 1985 - SOA - New Product Accounting Alternatives, Society of Actuaries - 26p
  • 1987 01 - Actuarial Update - Non-Guaranteed Promises: A New Standard of Practice, by William T. Tozer, Society of Actuaries - 8p
  • 1988 - SOA - Actuarial Opinion on Non-Guaranteed Elements, Society of Actuaries - 12p
  • 19xx? - William T. Tozer, Chairman - Task Force on Non-Guarantee Elements (American Academy of Actuaries)
  • 1986 1030 - Report - AAA to NAIC (Blanks Task Force) - RE: Life Insurance Non-Guarantee Elements - Attachment Three, American Academy of Actuaries - 1987-1, NAIC Proceedings - (p276B-276C) - 2p
  • Dear Commissioner Gillespie [Roxani M. Gillespie, Chairman - NAIC Blanks Task Force]:
    • Products that contain non-guarantee charges, benefits or premiums have become a very significant portion of today's life insurance market.
    • Universal life insurance is only one example of such a product.
    • Various insurance departments have expressed concern that adequate information on these new products is not being provided in the annual report to the insurance departments.
    • As a result, the Academy appointed a task force on non-guarantee elements.
    • This task force recommends that the annual statement to the insurance departments be modified.
    • The enclosed are the recommended modifications.
    • These recommendations include a set of instructions, a set of interrogatories and a specimen actuarial opinion.
    • The task force has no suggestion on the placement of these interrogatories in the annual statement.
    • The NAIC may wish to include them with other interrogatories or may feel it is more productive to have them in a separate location. 
    • If the task force can be of any assistance to you, please let me know.

--  Yours truly, William T. Tozer, Chairman, AAA - Task Force on Non-Guarantee Elements

  • INSTRUCTIONS
  • This interrogatory relates to the redetermination of non-guaranteed elements in individual life insurance and annuity contracts which provide for the adjustment of benefits, premiums or charges from time to time.
  • For purposes of this interrogatory, the term "determination" shall mean both determination at issue and subsequent redetermination.
  • For the purpose of this interrogatory, "Individual Contracts" includes contracts issued under the "group" umbrella of any trust which does not have the discretion to select the insurer(s) on behalf of all the individual insureds.
  • The specific types of business encompassed by this interrogatory include, but are not limited to, the following types of contracts if they contain non-guaranteed elements:
    • 1. Single and periodic premium deferred annuities.
    • 2. Universal life contracts for fixed and/or flexible premiums.
  • The difference in these two indexes would be the Non-Guaranteed Element. 

-- William T. Tozer

1981 - SOA - Individual Life Insurance Cost Disclosure Issues, Society of Actuaries - 22p

  • 8. Flexible life: This policy permits the policyholder to vary the amount of his premiums, the frequency of his premiums, and the amount of his death benefit.
    • With this policy, the policyholder pays a premium.
    • From the premium, various expense charges are deducted.
    • The remainder is added to the cash value that accrues at interest.
    • Each month a mortality charge is deducted based on the net amount at risk, the attained age of the insured, and the mortality rate schedule.

--  William T Tozer

1981 - SOA - Individual Life Insurance Cost Disclosure Issues, Society of Actuaries - 22p

  • Historically, companies were reluctant to replace life insurance because they might be in violation of the "twisting" laws.
    • Times have changed.
  • In 1969, the National Association of Insurance commissioners developed the 1970 Model Life Insurance Replacement Regulation.
    • This removed most of the "twisting" fears. 

--  William T Tozer, ACLI

1981 - SOA - Individual Life Insurance Cost Disclosure Issues, Society of Actuaries - 22p

  • 6. Multi-track plans:
    • These policies allow the insured the option to increase or decrease the amount of insurance and to change or convert the plan of insurance.
    • For these plans, I would calculate cost indexes based upon the assumption that the automatic option is exercised.
    • However, I might make additional displays of cost indexes on other options provided I stated the assumptions that pertain to the exercise of the options.

-- William T. Tozer

1981 - SOA - Individual Life Insurance Cost Disclosure Issues, Society of Actuaries - 22p

  • 3. Report from the Technical Actuarial Group - Ted Becker [CA] reported for the group.
    • He said that his group has two topics on its current agenda, which relate to the work of the task force.
    • The group met in March, 1983 in San Francisco, and again here in St. Louis on June 11 and 12, 1983.
    • With respect to universal life, Mr. Becker reported that the technical actuarial group saw the exposure draft prepared by Jim Jackson's advisory committee for the first time on June 12, 1983.
    • The provisions on reserves and cash values were largely developed from work done by an American Council of Life Insurance (ACLI) task force, chaired by William Tozer of Kentucky Central Life. One matter on which the group had questions was in the calculation of maximum expense allowances to be used in calculating cash values.
    • The group felt it might be too high in some cases.
    • The ACLI task force was asked to reconsider this expense allowance and either prepare a written justification or else a proposed revision.
    • There were also other questions raised at the meeting of the group, Mr. Becker reported, some of which were mentioned by Jim Jackson.
    • Others were whether companies should contractually limit the right of the policyholder to pay additional premiums and whether there should be more disclosure of the termination date under guaranteed minimum assumptions.
    • Mr. Becker said that he understands that further research is to be done by either Jim Jackson's committee or the ACLI task force on the various points listed by his group.

1983-2, NAIC Proceedings

  • LIFE COMMITTEE OF THE IASB
    • The function of the Committee is to develop actuarial standards of practice in the life insurance area.
    • In accordance with procedures prescribed by the Interim Actuarial Standards Board, this Committee is responsible for the development of Recommendations and Interpretations (To be announced)
    • Subcommittee on Dividends and Other Non-Guaranteed Elements

Tozer, William T, (FSA, E.A.), Senior Vice President, 1966 - Product Risk Management, Kentucky Central Life

1986 - AAA - Yearbook - American Academy of Actuaries - 406p

  • At the 1986 Annual Meeting of the American Council of Life Insurance ACLI Chairman John Pearson stated:
    • Our products must do what we say they do.
    • Our companies must fulfill their promises.
    • All the words in the world- the best government relations, the best public relations-will not be enough without performance.  (p2)

1987 01 - Actuarial Update - Non-Guaranteed Promises: A New Standard of Practice, by William T. Tozer - 8p

  • Date: 1986 1030
  • To: Dear Commissioner Fox:
  • From: AAA - American Academy of Actuaries
  • RE: NAIC Model Life Insurance Cost Disclosure Regulation - Recommended Changes to the NAIC Model Life Insurance Disclosure Regulation - Attachment Two 
  • Products that contain non-guarantee charges, benefits or premiums have become a very significant portion of today's life insurance market.
    • Universal life insurance is only one example of such a product.
    • Various insurance departments and members of the American Academy of Actuaries have expressed concerns about sales disclosures used with non-guarantee element products.
    • As a result, the Academy appointed a task force on nonguarantee elements.
    • This task force recommends that the NAIC Life Insurance Disclosure Model Regulation be amended to incorporate the enclosed changes.
    • At the time the latest revision was made in the Life Insurance Disclosure Model Regulation, generally accepted actuarial standards had not been established for dividends paid by stock life insurance companies.
    • As a result the revisions apply only to mutual life insurance companies.
    • Generally accepted actuarial practices have now been developed for dividends paid by stock life insurance companies.
      • As a result we recommend that any references to mutual life insurance companies in a model regulation be eliminated.
  • If the task force can be of any assistance to you, please let me know.

--  Yours truly, William T. Tozer, Chairman - Task Force on Non-Guarantee Elements, American Academy of Actuaries

1987-2, NAIC Proceedings 

  • ATTACHMENT FOUR - COMMENTS RECEIVED FROM INDUSTRY REGARDING PROPOSED AMENDMENTS TO NAIC MODEL RULES GOVERNING THE ADVERTISING OF LIFE INSURANCE - American Academy of Actuaries, William T. Tozer (sp) Tozier, Chairman of the Task Force on non-guaranteed elements.
    • Recommended modifications specific to definitions and sales illustrations directly related to life insurance products which contain "non-guaranteed elements;" e.g. values, premiums or benefits whose amount is not guaranteed by the term of the contract.
    • Response: The suggested changes were consistent with the intent of the proposal; and were incorporated into the draft of the rule.

1987-2, NAIC Proceedings