For many, rough economic times are knocking retirement income plans askew, leaving those approaching or in retirement with the task of repairing and rebuilding lost wealth, according to insurance and financial planning experts.
So, where should a market battered consumer start? The first rule is simply to know yourself, according to Mark Singer, a certified financial planner based in Lynn, Mass. “Know where you are, who you are and what you need,” he advises. By that, Singer says you need to know how much you will need on a monthly basis in retirement. Some do not know when they have attained their goal and are like bicyclists who just keep pedaling and pedaling, he explains. Singer works with clients to achieve that goal, using both expertise and investment platform tools from companies like Curian Capital, Denver, Colo.
The reason that this is important, Singer continues, is that once you have attained your goal, you can adjust your retirement income portfolio so that it holds investments that have less risk. This is possible because you no longer need the extra risk that comes with extra return.
Once a client understands what is really important to them and what is really needed for income, Singer says that he adds another 15-20% as a margin of error because “no one captures all the line items.” For instance, he says, a client might be looking at a gross figure rather than a net total amount of what is needed. Income taxes must be figured in as well as discretionary items such as a trip to Italy or making home improvements.
Singer also advises taking smaller monthly amounts of retirement income when you start retirement so that more of your portfolio can continue to grow.
Drew Denning, vice president-retirement services division, Principal Financial Group, Des Moines, Iowa, also strongly advises not taking too much of retirement income out of a portfolio at the start of retirement. But in order for retirees to understand this, he says that education is needed. A recent poll showed that 64% of respondents thought that an 8% or higher withdrawal rate was sustainable when the actual figure is 4-5%, Denning notes. And, he says that whatever the target withdrawal rate, you need 20-25 times that in your portfolio. So, for instance, if a retiree wanted to withdraw $1,000 annually, $20,000-$25,000 would be needed, Denning continues.
Denning says that “most are very unaware of what their financial situation actually is.” There was a gap of what retirees think they need and what they actually have that has only grown bigger with the recent financial turmoil, he adds. For example, most are not even aware of what health care costs and even if Medicare is used, there might still be $10,000-$15,000 in co-pays and premiums paid each year, Denning explains.
A solid understanding of one’s position is needed before one can even think about what financial products will help achieve a retirement goal, he continues. And many products such as certificates of deposit and immediate fixed annuities, while valuable products, are not paying good rates of interest right now, he notes.
One of the concerns with immediate annuities is that if the purchaser dies soon after the purchase, payments will cease and the family will never recover what was invested in the annuity, Denning says. But, he notes, only 7% are sold without the rider for an installment refund. Of course, he adds, that rider comes at a cost, reducing monthly payments by 5-8%.
In the high net worth market, traditionally, the major concern has been about protecting lifestyle, according to Walter Zultowski, senior vice president of research and concept development with Phoenix Companies, Hartford, Conn. But increasingly there is a shift to concerns about running out of money, he adds. That concern has grown since many retirement assets have taken a hit and been diminished, Zultowski continues.
And, interestingly enough, he notes, people do have a sense of how long they will live. People who have been asked about their life expectancies have had “uncanny ability to estimate their life expectancies to within a few years of actuarial projections.”
One of the things that happened following past recessions, Zultowski says, is that there is more product innovation to meet lessons learned. This time will be no different, he continues citing his company’s new universal life product that pays out on the death of the first spouse as an example of what is starting to surface in the market. There will also be more of a merger of elements of the insurance and investment world in future products, Zultowski predicts.
But, he continues, there is no substitute for a return to basics including maximizing a 401(k) plan when possible and periodically reviewing and rebalancing investments within that plan. Zultowski also notes, rebuilding lost wealth not happen overnight.
This article first appeared on Filife.com.
Wednesday, September 16, 2009
Monday, September 14, 2009
Enough Talk. Let’s Act On Health Care.
Much of the recent attention on health care reform has focused on Town Hall meetings, reaction to the anger reported during some of those meetings and President Obama’s address to a joint session of Congress last week.
But I think that President Obama’s remarks to a group of nurses on Sept. 10, the day following his address, really cut to the point. “…we have talked this issue to death, year after year, decade after decade. And the time for talk is winding down. The time for bickering has passed.”
And, if the time for bickering has not passed, then it is time for the nation to come to a decision. Do we really have the will and the desire to pass health care legislation? If we do, then let’s do it. If we don’t let’s accept the fact that dissension, fear or pure selfishness are too strong to fight in this country and let the matter go. The truth is maybe we have become too selfish a nation to really care what happens to those who are underinsured or not insured. If that turns out to be the case, then it is an ominous omen for where the country is heading. But, at least the nation can come to terms with that fact and move onto other issues.
Fortunately, I don’t believe that we as a nation are at that point. I think there is momentum to get the job done. But in order to tap into that momentum and will to look after all Americans, I think it is necessary to go back to our nation’s source.
As I watched President Obama’s health care address before Congress, I imagined what the 56 signers of the Declaration of Independence would have thought if they were watching the address. More specifically, I would have liked to have watched the address with the four signers who were physicians: Lyman Hall of Georgia; Josiah Bartlett and Matthew Thornton of New Hampshire; and Benjamin Rush of Philadelphia.
No doubt they would have been proud and amazed that their Declaration had resulted in the creation of the body of lawmakers on the television screen. Perhaps, they would have been a little dismayed at the lack of respect shown the President. There is a way to disagree. They respectfully but strongly did so in the Declaration when they spelled out why they were disenchanted with King George III. Saying that the President is lying is not only wrong but a sign of bad breeding. And, in a very real way it points to the deep, dangerous and intensifying partisan divisions not only on the health care issue but in the nation as a whole.
By the same token, I wonder if it was wise to chastise insurers during the President’s speech. Sure, they’ve done bad things in the past and possibly in the present and everyone likes a bad guy. But it is a little too easy to pick one scapegoat when a lot of different constituencies contributed to the current health care crisis. If coverage was wrongfully denied to people who died as a result of those denials or delays in coverage, then those companies should be tried both in the criminal and civil courts by states’ attorneys general. And, if they are found guilty, then they should not only be condemned. CEOs should be given jail time and court judgments should be imposed. And the courts should step in and establish plans to make sure that the culprits can’t do it again.
But alienating a key constituency in the health care debate will not advance the issue. America’s Health Insurance Plans, Washington, released a statement in which it states that “We agree the status quo is not sustainable” and noted that “We proposed health insurance reform to guarantee coverage to all Americans, eliminate pre-existing condition exclusions and rescissions, and no longer base premiums on a person’s health status or gender. To keep coverage as affordable as possible, these reforms must be paired with an effective coverage requirement to get everyone into the health care system.”
AHIP notes that it does not support a “government-run plan” but asserts that “the nation cannot afford to let this historic opportunity pass us by.”
The Founding Fathers would have been dismayed by the fact that it was necessary for the President to spell out why health care reform that covers everyone and prevents people from falling into the abyss of poverty is needed.
After all, they did help craft a document that says it is “self-evident” that “all men are created equal,” noting that “life” is one of the “unalienable rights.”
The President clarified the many unintentional and unfortunately deliberate attempts to misconstrue his plan. In that respect, it was a strong statesman-like speech that laid out the facts of his plan. He would like to see a public option available only for those who wanted it and you can keep the health insurance you want. And, granny, rest easy. No medical tribunal is going to put you down.
The message was clear and the outline of the plan well-defined. Where it was a little weak was on details. The President says that the plan will not put us in greater debt because there are ways to save in the current system. But, there doesn’t seem to be specifics on the savings.
Is that a death knell for the plan? I don’t think so. Did the four physician signers of the Declaration of Independence; Hall, Bartlett, Thornton and Rush have specifics on how the new government would develop and ultimately work? They might have had concepts but I doubt they had specifics. The Declaration itself is a very general document.
What they did have was a gut feeling that what they were signing onto was right and just. What they did have was the courage of their convictions and the willingness to take a leap of faith. I saw the same willingness in that speech.
I was heartened by the fact that the President still wants a public option. I think it can only help and not hurt. I was also heartened by the fact that he says he will listen to any serious proposal. The Republican response from Rep. Charles Boustany, R-La., a medical doctor, about making health insurance available across state lines, certainly is worthy of discussion although it may hurt the public option. But maybe it would be a reasonable way to ensure that Americans in areas where health insurance is not available could have affordable coverage.
Whatever the ultimate solution is, the overhaul is needed now. The situation is becoming too dire for too many Americans and we have too many other serious issues to delay this any longer.
With Congress back in session, it is time for its members to roll up their sleeves, keep the partisan politics to a minimum and remember the leap of faith that the 56 signers of the Declaration of Independence took when they signed a statement that left their future very uncertain.
And, as healers as well as Founding Fathers, the four physicians in that original group would have been as interested in healing the divisions in our country as they would be in providing health care for all.
But I think that President Obama’s remarks to a group of nurses on Sept. 10, the day following his address, really cut to the point. “…we have talked this issue to death, year after year, decade after decade. And the time for talk is winding down. The time for bickering has passed.”
And, if the time for bickering has not passed, then it is time for the nation to come to a decision. Do we really have the will and the desire to pass health care legislation? If we do, then let’s do it. If we don’t let’s accept the fact that dissension, fear or pure selfishness are too strong to fight in this country and let the matter go. The truth is maybe we have become too selfish a nation to really care what happens to those who are underinsured or not insured. If that turns out to be the case, then it is an ominous omen for where the country is heading. But, at least the nation can come to terms with that fact and move onto other issues.
Fortunately, I don’t believe that we as a nation are at that point. I think there is momentum to get the job done. But in order to tap into that momentum and will to look after all Americans, I think it is necessary to go back to our nation’s source.
As I watched President Obama’s health care address before Congress, I imagined what the 56 signers of the Declaration of Independence would have thought if they were watching the address. More specifically, I would have liked to have watched the address with the four signers who were physicians: Lyman Hall of Georgia; Josiah Bartlett and Matthew Thornton of New Hampshire; and Benjamin Rush of Philadelphia.
No doubt they would have been proud and amazed that their Declaration had resulted in the creation of the body of lawmakers on the television screen. Perhaps, they would have been a little dismayed at the lack of respect shown the President. There is a way to disagree. They respectfully but strongly did so in the Declaration when they spelled out why they were disenchanted with King George III. Saying that the President is lying is not only wrong but a sign of bad breeding. And, in a very real way it points to the deep, dangerous and intensifying partisan divisions not only on the health care issue but in the nation as a whole.
By the same token, I wonder if it was wise to chastise insurers during the President’s speech. Sure, they’ve done bad things in the past and possibly in the present and everyone likes a bad guy. But it is a little too easy to pick one scapegoat when a lot of different constituencies contributed to the current health care crisis. If coverage was wrongfully denied to people who died as a result of those denials or delays in coverage, then those companies should be tried both in the criminal and civil courts by states’ attorneys general. And, if they are found guilty, then they should not only be condemned. CEOs should be given jail time and court judgments should be imposed. And the courts should step in and establish plans to make sure that the culprits can’t do it again.
But alienating a key constituency in the health care debate will not advance the issue. America’s Health Insurance Plans, Washington, released a statement in which it states that “We agree the status quo is not sustainable” and noted that “We proposed health insurance reform to guarantee coverage to all Americans, eliminate pre-existing condition exclusions and rescissions, and no longer base premiums on a person’s health status or gender. To keep coverage as affordable as possible, these reforms must be paired with an effective coverage requirement to get everyone into the health care system.”
AHIP notes that it does not support a “government-run plan” but asserts that “the nation cannot afford to let this historic opportunity pass us by.”
The Founding Fathers would have been dismayed by the fact that it was necessary for the President to spell out why health care reform that covers everyone and prevents people from falling into the abyss of poverty is needed.
After all, they did help craft a document that says it is “self-evident” that “all men are created equal,” noting that “life” is one of the “unalienable rights.”
The President clarified the many unintentional and unfortunately deliberate attempts to misconstrue his plan. In that respect, it was a strong statesman-like speech that laid out the facts of his plan. He would like to see a public option available only for those who wanted it and you can keep the health insurance you want. And, granny, rest easy. No medical tribunal is going to put you down.
The message was clear and the outline of the plan well-defined. Where it was a little weak was on details. The President says that the plan will not put us in greater debt because there are ways to save in the current system. But, there doesn’t seem to be specifics on the savings.
Is that a death knell for the plan? I don’t think so. Did the four physician signers of the Declaration of Independence; Hall, Bartlett, Thornton and Rush have specifics on how the new government would develop and ultimately work? They might have had concepts but I doubt they had specifics. The Declaration itself is a very general document.
What they did have was a gut feeling that what they were signing onto was right and just. What they did have was the courage of their convictions and the willingness to take a leap of faith. I saw the same willingness in that speech.
I was heartened by the fact that the President still wants a public option. I think it can only help and not hurt. I was also heartened by the fact that he says he will listen to any serious proposal. The Republican response from Rep. Charles Boustany, R-La., a medical doctor, about making health insurance available across state lines, certainly is worthy of discussion although it may hurt the public option. But maybe it would be a reasonable way to ensure that Americans in areas where health insurance is not available could have affordable coverage.
Whatever the ultimate solution is, the overhaul is needed now. The situation is becoming too dire for too many Americans and we have too many other serious issues to delay this any longer.
With Congress back in session, it is time for its members to roll up their sleeves, keep the partisan politics to a minimum and remember the leap of faith that the 56 signers of the Declaration of Independence took when they signed a statement that left their future very uncertain.
And, as healers as well as Founding Fathers, the four physicians in that original group would have been as interested in healing the divisions in our country as they would be in providing health care for all.
Sunday, September 13, 2009
The 30-Day Project Continues As Part of Life Insurance Awareness Month
Last week, the Insurance Bellwether launched the 30-day project as part of Life Insurance Awareness Month. The goal is to ask 30 average Joes and Janes three questions:
--What is the first thing that comes to mind when you think of life insurance?
--What is the best thing about life insurance?
--What is the worst thing that comes to mind when you think about life insurance?
Thirty days, thirty viewpoints. Here is the second round of answers for the man and woman on the street.
Campaign worker—Expensive, “giving something to your family”, losing a person.
Hair Colorist—Death; Financial Protection; expense.
Architect—Family; comfort; the way insurance is sold—“scare tactics, talking down to [prospects], and manipulation.”
Bicyclist—Death; the protection it can give to a family, not so much people my age [mid-20s] but people my parents’ age; the expense
Bell Captain at The Standard Hotel—Money; the protection it provides to a family; “The expense is unbelievable. If you have are alive you have too much, but if you die, then you can’t have enough of it.”
Data Programmer—Monthly payments; The “Feeling that you've done the right thing by your dependents;” Monthly payments.
Editor-Literary Journal--Burial insurance; 1-Life insurance is one means of planning for the future--one's own and one's beneficiary(ies). Some policies I think can eventually be used like savings accounts--i.e., help the policy holder. I consider people who take life insurance policies stable and forward looking. 3-I'm not sure many people actually need it. Having savings--money in the bank--or solid investments (whatever those are today) might be a better way to go for most people. For example, my annuity earns great interest and will be available for my own use down the road and what's left over will go to my beneficiaries. Most life insurance policies earn little to no interest. I know for example my boss is dead set against life insurance policies--thinks they are a waste of money.
Housewife—growing older and becoming more mature and responsible; protecting your family; the process of having to go through blood tests and other requirements that slow down the process of getting more insurance.
--What is the first thing that comes to mind when you think of life insurance?
--What is the best thing about life insurance?
--What is the worst thing that comes to mind when you think about life insurance?
Thirty days, thirty viewpoints. Here is the second round of answers for the man and woman on the street.
Campaign worker—Expensive, “giving something to your family”, losing a person.
Hair Colorist—Death; Financial Protection; expense.
Architect—Family; comfort; the way insurance is sold—“scare tactics, talking down to [prospects], and manipulation.”
Bicyclist—Death; the protection it can give to a family, not so much people my age [mid-20s] but people my parents’ age; the expense
Bell Captain at The Standard Hotel—Money; the protection it provides to a family; “The expense is unbelievable. If you have are alive you have too much, but if you die, then you can’t have enough of it.”
Data Programmer—Monthly payments; The “Feeling that you've done the right thing by your dependents;” Monthly payments.
Editor-Literary Journal--Burial insurance; 1-Life insurance is one means of planning for the future--one's own and one's beneficiary(ies). Some policies I think can eventually be used like savings accounts--i.e., help the policy holder. I consider people who take life insurance policies stable and forward looking. 3-I'm not sure many people actually need it. Having savings--money in the bank--or solid investments (whatever those are today) might be a better way to go for most people. For example, my annuity earns great interest and will be available for my own use down the road and what's left over will go to my beneficiaries. Most life insurance policies earn little to no interest. I know for example my boss is dead set against life insurance policies--thinks they are a waste of money.
Housewife—growing older and becoming more mature and responsible; protecting your family; the process of having to go through blood tests and other requirements that slow down the process of getting more insurance.
Friday, September 11, 2009
We Honor You, We Miss You
Eight years ago today, the unspeakable happened. A perfect day with not a cloud in the sky was darkened by hate. For those lost on September 11, we honor you and miss you.
For those in our own insurance community who lost their lives, we honor you.
Peace.
For those in our own insurance community who lost their lives, we honor you.
Peace.
Wednesday, September 9, 2009
New SVL Moves Closer To Reality
Revisions to the Standard Valuation Law, or SVL in shorthand for those who have been following the issue for the last several years, moved closer to reality earlier this afternoon. The model progressed when members of the Life Insurance and Annuities “A” Committee of the National Association of Insurance Commissioners, Kansas City, Mo., passed it in an 11-1 vote. New York abstained.
The vote gives the model the two-thirds committee majority it needs under NAIC rules to be considered for full adoption as a model law rather than simply NAIC guidance.
The new SVL and an accompanying Valuation Manual are considered lynchpins to a movement that would allow more flexibility for product reserves. The Valuation Manual is the roadmap of practical, specific guidance that makes the SVL work. Flexibility is considered important because regulators said that they were continually called upon to develop new models to reflect either changing products or skirting around existing reserving requirements. The new SVL version would take a more holistic approach, looking at all the risks of an insurer and the products it sold rather than strictly using formulas to determine reserves.
The conference call discussion included reservations expressed both by the American Council of Life Insurers, Washington, as well as state insurance commissioners, but for different reasons.
John Bruins, a life actuary with the ACLI raised the first issue of making sure that the proposed law would ensure uniformity both at adoption and during its implementation. Different requirements in different states would result in companies having to run multiple actuarial scenarios, an “expensive and very time consuming process,” he explained.
But regulators including New York life actuary Bill Carmello and Connecticut Insurance Commissioner Tom Sullivan said that commissioners should be able to challenge any assumption made by a company when preparing reserving scenarios. Sullivan pointed out similar commissioner discretion in the Accounting Practices and Procedures Manual which he called “tried, true and tested.”
The discussion then addressed prescribing assumptions in the Valuation Manual if there is no company data available to create assumptions in the actuarial testing process or if the assumptions are outside company control such as estimating future interest rates. The ACLI’s Bruins asked if that would draw in other unknowns such as the choice of premium mode consumers make.
Larry Bruning, chair of the NAIC’s Life & Health Actuarial Task Force, and a Kansas life actuary, said that any “hole” could be filled by the Valuation Manual. Paul Graham, chief actuary with the ACLI, said that the Valuation Manual might ultimately catch up with a brand new product but until that point, companies would be left without guidance.
Donna Claire, who is spearheading the whole effort for the American Academy of Actuaries, Washington, said that while the Academy had some concern, it wholeheartedly supports the SVL proposal and believes that the Valuation Manual could be used to address this issue.
However, Wisconsin Insurance Commissioner Sean Dilweg expressed concern over passing a model law when the content which would be in the Valuation Manual was not yet developed. Adam Hamm, North Dakota insurance commissioner moved that the model be advanced with the condition that the Valuation Manual must be passed by the end of 2009.
Dilweg also was concerned that the proposal encompasses health, disability income and annuities as well as life insurance products. He said that it was important that the new model law have “guardrails” and expressed reservations that reserving floors were only for life insurance products. But Kansas’ Bruning explained that if the model is limited to life insurance products then it would require a change in law each time another product such as fixed annuities was added. And, in response to other regulators such as New York’s Carmello, Bruning said that the proposed model law would leave in place existing state reserving laws for products until new guidelines are put in the Valuation Manual, so there would be guidance for these products.
Wisconsin’s Dilweg said he would raise the issue of including health, long term care and disability insurance in the model at a later point in the process.
The vote gives the model the two-thirds committee majority it needs under NAIC rules to be considered for full adoption as a model law rather than simply NAIC guidance.
The new SVL and an accompanying Valuation Manual are considered lynchpins to a movement that would allow more flexibility for product reserves. The Valuation Manual is the roadmap of practical, specific guidance that makes the SVL work. Flexibility is considered important because regulators said that they were continually called upon to develop new models to reflect either changing products or skirting around existing reserving requirements. The new SVL version would take a more holistic approach, looking at all the risks of an insurer and the products it sold rather than strictly using formulas to determine reserves.
The conference call discussion included reservations expressed both by the American Council of Life Insurers, Washington, as well as state insurance commissioners, but for different reasons.
John Bruins, a life actuary with the ACLI raised the first issue of making sure that the proposed law would ensure uniformity both at adoption and during its implementation. Different requirements in different states would result in companies having to run multiple actuarial scenarios, an “expensive and very time consuming process,” he explained.
But regulators including New York life actuary Bill Carmello and Connecticut Insurance Commissioner Tom Sullivan said that commissioners should be able to challenge any assumption made by a company when preparing reserving scenarios. Sullivan pointed out similar commissioner discretion in the Accounting Practices and Procedures Manual which he called “tried, true and tested.”
The discussion then addressed prescribing assumptions in the Valuation Manual if there is no company data available to create assumptions in the actuarial testing process or if the assumptions are outside company control such as estimating future interest rates. The ACLI’s Bruins asked if that would draw in other unknowns such as the choice of premium mode consumers make.
Larry Bruning, chair of the NAIC’s Life & Health Actuarial Task Force, and a Kansas life actuary, said that any “hole” could be filled by the Valuation Manual. Paul Graham, chief actuary with the ACLI, said that the Valuation Manual might ultimately catch up with a brand new product but until that point, companies would be left without guidance.
Donna Claire, who is spearheading the whole effort for the American Academy of Actuaries, Washington, said that while the Academy had some concern, it wholeheartedly supports the SVL proposal and believes that the Valuation Manual could be used to address this issue.
However, Wisconsin Insurance Commissioner Sean Dilweg expressed concern over passing a model law when the content which would be in the Valuation Manual was not yet developed. Adam Hamm, North Dakota insurance commissioner moved that the model be advanced with the condition that the Valuation Manual must be passed by the end of 2009.
Dilweg also was concerned that the proposal encompasses health, disability income and annuities as well as life insurance products. He said that it was important that the new model law have “guardrails” and expressed reservations that reserving floors were only for life insurance products. But Kansas’ Bruning explained that if the model is limited to life insurance products then it would require a change in law each time another product such as fixed annuities was added. And, in response to other regulators such as New York’s Carmello, Bruning said that the proposed model law would leave in place existing state reserving laws for products until new guidelines are put in the Valuation Manual, so there would be guidance for these products.
Wisconsin’s Dilweg said he would raise the issue of including health, long term care and disability insurance in the model at a later point in the process.
Friday, September 4, 2009
September Hath 30 Days and Life Insurance Awareness—the 30-Day Project Kicks Off
Life Insurance Awareness Month kicked off earlier this week with a message from Gov. Frank Keating, president and CEO of the American Council of Life Insurers, Washington. Keating noted that “These are difficult times. Families have seen their hopes and dreams shattered during the past year as the economy faltered and unemployment soared. Understandably, many Americans are more focused on getting through the next week than on long-term financial planning.”
But, he added, “Life insurance is the cornerstone of any financial plan. It provides financial security at the moment of greatest need. Life insurance is certainly no substitute for the loss of a breadwinner, but it can help a family withstand the financial pressure.”
The Insurance Bellwether thought it would be interesting to find out what the average guy and gal think about life insurance. Toward that end The Bellwether will kick off its 30-day project to get their gut reactions.
The Bellwether asked average people three questions in the following order:
-What is the first thing that comes to mind when they think of life insurance?
-What is the best feature of life insurance?
-What is the worst feature?
Here are six responses from the first round of interviews. Some answered the three questions while others took a stream of consciousness approach. The goal is to have several more rounds of interviews with a total of 30 or one per day.
1-Retail Clerk-Staples—Money; Money; and a person you love dying in order for you to get it.
2+3-Bake Shop—Counter person—Forensic Science and shows in which the victim is killed for insurance money; the ability to put kids through college if a parent dies; didn’t really discuss a negative.
--Counter person—“I wonder how many people think about it. I wonder if my dad has insurance. He was a life insurance salesperson a long time ago. It can provide protection.”
4-Editor in the Advertising industry—I don’t think about it.
5-Postal Mailwoman—“I don’t see anything bad about life insurance. No one is guaranteed tomorrow. I know people don’t want to pay that monthly bill but you pay other bills like rent and food. I’ve seen people who don’t have it and they’re putting money in the ground [when a love one dies.] Or there is not enough insurance to cover the expense. There’s nothing bad about it.”
6-Nurse—“I don’t really have life insurance. I get some through work and it doesn’t cost me anything. I receive 1x my salary. The good thing is that there are no health exam requirements. I don’t have kids and it is enough to bury me and leave my partner something.”
But, he added, “Life insurance is the cornerstone of any financial plan. It provides financial security at the moment of greatest need. Life insurance is certainly no substitute for the loss of a breadwinner, but it can help a family withstand the financial pressure.”
The Insurance Bellwether thought it would be interesting to find out what the average guy and gal think about life insurance. Toward that end The Bellwether will kick off its 30-day project to get their gut reactions.
The Bellwether asked average people three questions in the following order:
-What is the first thing that comes to mind when they think of life insurance?
-What is the best feature of life insurance?
-What is the worst feature?
Here are six responses from the first round of interviews. Some answered the three questions while others took a stream of consciousness approach. The goal is to have several more rounds of interviews with a total of 30 or one per day.
1-Retail Clerk-Staples—Money; Money; and a person you love dying in order for you to get it.
2+3-Bake Shop—Counter person—Forensic Science and shows in which the victim is killed for insurance money; the ability to put kids through college if a parent dies; didn’t really discuss a negative.
--Counter person—“I wonder how many people think about it. I wonder if my dad has insurance. He was a life insurance salesperson a long time ago. It can provide protection.”
4-Editor in the Advertising industry—I don’t think about it.
5-Postal Mailwoman—“I don’t see anything bad about life insurance. No one is guaranteed tomorrow. I know people don’t want to pay that monthly bill but you pay other bills like rent and food. I’ve seen people who don’t have it and they’re putting money in the ground [when a love one dies.] Or there is not enough insurance to cover the expense. There’s nothing bad about it.”
6-Nurse—“I don’t really have life insurance. I get some through work and it doesn’t cost me anything. I receive 1x my salary. The good thing is that there are no health exam requirements. I don’t have kids and it is enough to bury me and leave my partner something.”
Tuesday, September 1, 2009
NAIC Says Self Assessment Shows Insurance Regulators Observe International Principles
The National Association of Insurance Commissioners, Kansas City, Mo., has completed a self-assessment to evaluate “the extent to which U.S. insurance regulatory practices “observe” international principles established by the International Association of Insurance Supervisors, Basel, Switzerland.
The self-assessment demonstrates the “many ways insurance regulation in the U.S. is absolutely consistent with international standards,” said Roger Sevigny, NAIC President and New Hampshire Insurance Commissioner.
The self-assessment was undertaken along with self-assessments undertaken by other U.S. financial regulators under the Financial Sector Assessment Program, which is coordinated principally by the U.S. Treasury Department. The NAIC says that “conducted worldwide, the FSAP is a joint project of the World Bank and the International Monetary Fund (IMF).” The exercise “further highlights the importance of our extensive contributions to the development of international standards at the IAIS,” said Dr. Therese (Terri) M. Vaughan, Chief Executive Officer of the NAIC.”
The self assessment is based on the following insurance core principles issued by the IAIS in October 2003:
ICP 1 Conditions for effective insurance supervision
ICP 2 Supervisory objectives
ICP 3 Supervisory authority
ICP 4 Supervisory process
ICP 5 Supervisory cooperation and information sharing
ICP 6 Licensing
ICP 7 Suitability of persons
ICP 8 Changes in control and portfolio transfers
ICP 9 Corporate governance
ICP 10 Internal control
ICP 11 Market analysis
ICP 12 Reporting to supervisors and off-site monitoring
ICP 13 On-site inspection
ICP 14 Preventive and corrective measures
ICP 15 Enforcement or sanctions
ICP 16 Winding-up & exit from the market
ICP 17 Group-wide supervision
ICP 18 Risk assessment and management
ICP 19 Insurance activity
ICP 20 Liabilities
ICP 21 Investments
ICP 22 Derivatives and similar commitments
ICP 23 Capital adequacy and solvency
ICP 24 Intermediaries
ICP 25 Consumer protection
ICP 26 Information, disclosure & transparency towards the market
ICP 27 Fraud
ICP 28 Anti-money laundering/ Combating the Financing of Terrorism.
The self-assessment demonstrates the “many ways insurance regulation in the U.S. is absolutely consistent with international standards,” said Roger Sevigny, NAIC President and New Hampshire Insurance Commissioner.
The self-assessment was undertaken along with self-assessments undertaken by other U.S. financial regulators under the Financial Sector Assessment Program, which is coordinated principally by the U.S. Treasury Department. The NAIC says that “conducted worldwide, the FSAP is a joint project of the World Bank and the International Monetary Fund (IMF).” The exercise “further highlights the importance of our extensive contributions to the development of international standards at the IAIS,” said Dr. Therese (Terri) M. Vaughan, Chief Executive Officer of the NAIC.”
The self assessment is based on the following insurance core principles issued by the IAIS in October 2003:
ICP 1 Conditions for effective insurance supervision
ICP 2 Supervisory objectives
ICP 3 Supervisory authority
ICP 4 Supervisory process
ICP 5 Supervisory cooperation and information sharing
ICP 6 Licensing
ICP 7 Suitability of persons
ICP 8 Changes in control and portfolio transfers
ICP 9 Corporate governance
ICP 10 Internal control
ICP 11 Market analysis
ICP 12 Reporting to supervisors and off-site monitoring
ICP 13 On-site inspection
ICP 14 Preventive and corrective measures
ICP 15 Enforcement or sanctions
ICP 16 Winding-up & exit from the market
ICP 17 Group-wide supervision
ICP 18 Risk assessment and management
ICP 19 Insurance activity
ICP 20 Liabilities
ICP 21 Investments
ICP 22 Derivatives and similar commitments
ICP 23 Capital adequacy and solvency
ICP 24 Intermediaries
ICP 25 Consumer protection
ICP 26 Information, disclosure & transparency towards the market
ICP 27 Fraud
ICP 28 Anti-money laundering/ Combating the Financing of Terrorism.
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