The Insurance Forum 2002: Vol 29 Table of Contents

5 Pages·2002·1.3 MB·English

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CONTENTS 2002
Editor's note: Volume 29 of The Insurance Forum, consisting of eleven regular monthly issues, the September 2002
special ratings issue, and this table of contents, may be purchased for $90. For ordering instructions and prices of single |
back issues, see the box at the bottom of the second page of this table of contents
Vol. 29, No. 1 (January, 2002) THE YEARLY PRICE OF PROTECTION
RE—V—I,S ITINGe eCR EDIT INTOSTU! RANC—E AaN OTHER IMPORTANT NONDISCLOS
ca hucirn ued - IN LIFE INSURANCE
Discusses a credit insurance report issued jointly in idlinten ales i ser $1.000 of lif
November 2001 by the Consumer F‘e der:a ti‘o n of ‘ er ’s pemnnaen Beoer d mgt‘ es aope rta| w)i nsio- oniinsy
ance protection should be disclosed to consumers
America and the Center for Economic Justice, de-
scribes the magnitude of the overcharges imposed THE CASE AGAINST SECRET
on credit insurance consumers, and explains that DIVIDEND FORMULAS
the original purpose of credit insurance has Discusses why the formulas used by insurance
changed and the objective now is to enhance the companies to determine the dividends on partici
profitability of loans pating life insurance policies should be disclosed to
AN UPDATE TO OUR SEPTEMBER 2001 State regulatory officials and should be available to
the public
SPECIAL RATINGS ISSUE
Lists rating actions taken by A. M. Best, Fitch Rat-
ings, Moody’s Investors Service, Standard & Vol. 29, No. 3 (March, 2002)
Poor’s, and Weiss Ratings subsequent to publica- LEGAL SETBACKS FOR TAX-MOTIVATED
tion of our September 2001 special ratings issue COLI PLANS
CONFRONTING THE TERRORISM EXPOSURE Discusses the evolution of tax-motivated, broad
Discusses the need for federal government involve- based, highly leveraged, corporate-owned life
ment in dealing with the consequences of the insurance (sometimes referred to as “janitor insur
terrorism exposure, and describes the difficulties in ance” and referred to in this article as “COLI”),
defining terrorism for the purposes of terrorism ex- indicates the scope of COLI, describes four COLI
clusions in insurance policies lawsuits (involving the U. S. Treasury against
American Electric Power, Camelot Music, Winn-
Vol. 29, No. 2 (February, 2002) Dixie Stores, and Dow Chemical) that have resulted
in decisions favoring the government, discusses
THE SHRINKING SECONDARY MARKET
COLI-related amendments to state insurable inter
FOR LIFE INSURANCE POLICIES
est statutes, and mentions the relationship between
Presents data from the Florida and Texas insurance
COLI and life setthements
departments to illustrate how the viatical industry
is declining, and mentions developments at Viati- A FEDERAL GOVERNMENT REINSURANCE
cus and Life Partners to illustrate the lack of FACILITY FOR CATASTROPHES
progress in the life setthement industry Introduces the article by Dan R. Anderson
Copyright © 2002 Insurance Forum, Inc
Contents 2002 The Insurance Forum
PROVIDING CATASTROPHE INSURANCE and two earlier surveys, mentions the response of
COVERAGE FOLLOWING THE TERRORIST the National Association of Insurance Commis-
EVENTS OF SEPTEMBER I1 sioners, describes a recent lobbying campaign by
(BY DAN R. ANDERSON) Robert E. Wilcox, an actuarial consultant and for-
Discusses the implications of catastrophes for mer insurance commissioner, and discusses the sec-
the insurance industry, describes the concept of a ond settlement of a class action lawsuit against the
federal reinsurance facility for terrorist acts, and Massachusetts Mutual Life Insurance Company
identifies some advantages of the concept
Vol. 29, No. 6 (June, 2002)
Vol. 29, No. 4 (April, 2002)
THE “LEAP” PROVISION IN THE 1997
“LEAP” AND THE DIVERSION OF FUNDS INTO SETTLEMENT OF THE SALES PRACTICES
CASH-VALUE LIFE INSURANCE LAWSUIT AGAINST JOHN HANCOCK
Presents, in this and several other articles in a spe- Discusses a special provision relating to the Life
cial 12-page issue on the Lifetime Economic Ac- Economic Acceleration Process (LEAP) in the
celeration Process (LEAP), an overview of LEAP,
1997 settlement of a class action lawsuit against the
lists some errors and inconsistencies in LEAP, dis- John Hancock Mutual Life Insurance Company
cusses LEAP’s approach to various “problems,” alleging deceptive sales practices
identifies some timing errors in LEAP, describes
ON THE INDEPENDENCE OF IMSA’S
the struggle for access to LEAP material, includes
INDEPENDENT ASSESSORS
biographical information about LEAP’s founder,
describes how LEAP uses a book by the late Discusses the recent deposition testimony of
Solomon S. Huebner, and discusses the relationship Robert E. Wilcox, an actuarial consultant and for-
of LEAP to The Guardian Life Insurance Company mer insurance commissioner, who suggested it is
standard practice for a consultant to an insurer to
OUR DETAILED 2000-2001 INDEX
perform the independent assessment required for
Mentions the availability of a detailed 32-page the insurer’s membership in the Insurance Market-
index covering the 312 pages of The Insurance place Standards Association (IMSA), and describes
Forum from January 2000 through December 2001
my correspondence with IMSA
Vol. 29, No. 5 (May, 2002) BELATED (1999) COMPENSATION DATA FROM
THE NEW YORK INSURANCE DEPARTMENT
THE REWRITING OF HISTORY BY OPPONENTS
Describes our legal struggle with the New York
OF DISCLOSURE OF FRACTIONAL PREMIUM
department over the availability of compensation
CHARGES AS ANNUAL PERCENTAGE RATES
exhibits filed by life insurance companies, and pre-
Discusses, in this and several other articles in a sents data, based solely on those exhibits, showing
special 12-page issue on fractional (modal) premi- the compensation received by individuals who
ums, statements by disclosure opponents, presents received $600,000 or more in 1999
some historical background on the subject, dis-
SETTLEMENT OF STATE ALLEGATIONS
cusses my 2001 survey of insurance commissioners
RELATING TO BANKERS INSURANCE
COMPANY’ S INVESTIGATION OF A FLORIDA
INSURANCE DEPARTMENT EMPLOYEE
The Insurance Forum is published monthly by
Insurance Forum, Inc., P. O. Box 245, Ellettsville, Refers to an article in our October 2000 issue de-
Indiana 47429-0245. www.theinsuranceforum.com. scribing how Bankers Insurance Company (St.
Telephone (812) 876-6502. ISSN 0095-2923. The Petersburg, FL) initiated an intensive and highly in-
subscription price is $90 per year. trusive private investigation of Kevin M. McCarty,
The September 2002 special ratings issue is $20. a member of the staff of the Florida insurance de-
The January, March, April, May, July, August, and
partment, mentions the administrative complaint
October 2002 issues are $10 each. The other 2002
filed against the company by Tom Gallagher, the
issues are $5 each.
Florida insurance commissioner, and describes the
We do not impose any mailing, shipping, or han-
punishment meted out by the commissioner in
dling charges, but we require prepayment by check,
MasterCard, or Visa. To enter a credit card order by exchange for settling the complaint
telephone, call toll-free 1-888-876-9590 (U. S. only).
Indiana addressees please add 6% sales tax. Vol. 29, No. 7 (July, 2002)
© 2002 Insurance Forum, Inc. All rights reserved.
The Insurance Forum may not be reproduced in :AP” RESPONSES TO OUR SPECIAL
whole or in part without permission in writing from
the publisher. Discusses the responses prepared by the Life Eco-
nomic Acceleration Process (LEAP) to our April
Copyright © 2002 Insurance Forum, Inc.
The Insurance Forum Contents 2002
2002 special LEAP issue, explains why we stand life-health insurance companies in the U. S. and
behind the contents of our special issue, and con- Canada as of August 2, 2002 by A. M. Best, Fitch
cludes that the problems with LEAP could be fixed Ratings, Moody’s Investors Service, Standard &
but that doing so would require LEAP’s acknowl- Poor’s, and Weiss Ratings, includes lists of compa-
edgment of the problems nies suggested for conservative consumers, pro
vides a watch list of 813 life-health companies,
FROM THE MAILBAG
explains how consumers may use the lists, and in-
Comments by John F. Ocwieja and William H.
cludes the rating firms’ descriptions of their rating
Damora
categories and their rating distributions
EXECUTIVES’ COMPENSATION IN 2001
Shows 2001 compensation of persons who received
Vol. 29, No. 10 (October, 2002)
$600,000 or more from insurance companies
RECENT DEVELOPMENTS RELATING TO THE
Vol. 29, No. 8 (August, 2002) “LEAP” SYSTEM
Discusses the issuance of a $6 million life insur-
A BIG PAYDAY FOR SIX DEPARTING
ance policy by The Guardian Life Insurance Com-
EXECUTIVES OF PROVIDENT MUTUAL
pany of America in response to an application
Refers to the sponsored demutualization of the submitted by an agent who used the Life Economic
Provident Mutual Life Insurance Company and the Acceleration Process (LEAP) to make the sale, de-
subsequent acquisition of the company by Nation- scribes an endorsement of LEAP on Guardian’s
wide Financial Services, shows a detailed break-
website, describes two pieces of LEAP-inspired
down of the total of $36 million that was to be paid
material that appear on the website of a large
to Robert W. Kloss, the outgoing chairman and Guardian agency apparently dedicated to LEAP,
chief executive officer of Provident, and five other
comments on the LEAP response to the article
Provident executives who were to leave the com- about LEAP in our June 2002 issue, and discusses
pany after the demutualization and acquisition, dis- a letter about The Insurance Forum circulated by
cusses the question of whether the amounts are LEAP to its constituents
reasonable, and identifies several other aspects of
the arrangement THE NONPAY MENT OF INSURANCE CLAIMS
Introduces the article by Richard E. Stewart and
RECENT LETTERS FROM “LEAP” AND
Barbara D. Stewart
GUARDIAN LIFE
Describes a letter we received from Robert FROM THE MAILBAG
Castiglione, creator of the Life Economic Acceler- Comments by Craig J. Yoder, David Marrone,
ation Process (LEAP) and chief executive officer of Susan E. Brown, Don Wallar, and Gerald Gordon
LEAP SYSTEMS, presents a letter we received
from Joseph D. Sargent, CLU, chairman and chief THE LOSS OF THE CERTAINTY EFFECT
executive officer of The Guardian Life Insurance (BY RICHARD E. STEWART AND BARBARA D.
Company of America, regarding the article about STEWART)
LEAP in our June 2002 issue, and discusses our Says the buyer’s assumption that claims will be
response to the letter paid is the key to the value of what insurers sell,
indicates that recent changes in the insurance busi-
RISK-BASED CAPITAL DATA FOR 2001
ness have placed a cloud over the assumption of
Exp!ains risk-based capital data, and presents 2001
certain payment, identifies those recent changes in
and other recent years’ data for life-health and
the insurance business, discusses those recent
property-liability insurance companies
changes from an economic perspective, describes
SURPLUS NOTE USAGE BY INSURERS the changes that occurred as a result of similar
Lists the amounts of surplus notes outstanding in occurrences in the past, and discusses possible
life-health and property-liability insurance compa- responses to the current threats to the business
nies at the end of 2001 and 2000, and shows the
MOODY’S REPORT ON LIFE INSURERS’ BOND
effect of surplus notes on the risk-based capital
EXPOSURE TO TROUBLED CORPORATIONS
ratios of the companies issuing the surplus notes
Refers to a report published in August 2002 by
Moody’s Investors Service entitled “Troubled
Vol. 29, No. 9 (September, 2002)
Credits: Pressure on the U. S. Life Insurance Indus-
THE FINANCIAL STRENGTH OF LIFE-HEALTH try and Its Ratings Increases,” describes the data
INSURANCE COMPANIES included in the report, presents the summary
Provides, in a 36-page special ratings issue, a list opinion in the report, and offers our readers a com-
showing 4,183 financial ratings assigned to 1,808 plimentary reprint of the full report
Copyright © 2002 Insurance Forum, Inc.
Contents 2002 The Insurance Forum
BELATED 2000 COMPENSATION DATA FROM department, showing the compensation received by
THE NEW YORK INSURANCE DEPARTMENT individuals who received $600,000 or more in 2001
Describes our legal struggle with the New York
FURTHER DEVELOPMENTS AT CONSECO
insurance department over the availability of
Discusses a report circulated by Townsend &
compensation exhibits filed by life insurance com-
Schupp (Hartford, CT), a private rating firm, con-
panies with the department, discusses the implica-
cerning the “extraordinary” dividends paid by the
tions of the favorable court decision we obtained in
insurance subsidiaries of Conseco to their parent
New York, and presents data, based solely on the
and to their sister subsidiaries during the first half
New York exhibits, showing the compensation
of 2002
received by individuals who received $600,000 or
more in 2000
Vol. 29, No. 12 (December, 2002)
AN UPDATE ON THE CONSECO COMPANIES’
RATINGS THE VENDETTA AGAINST NORTHWESTERN
Describes the rating downgrades of the insurance MUTUAL
subsidiaries of Conseco that occurred in August Mentions the vendetta being waged by Policy-
2002 subsequent to the August 2 cutoff date for our owner Protection Services, Inc. (PPSI) against The
September 2002 special ratings issue Northwestern Mutual Life Insurance Company,
refers to our two earlier articles about PPSI’s tac-
Vol. 29, No. 11 (November, 2002) tics, discusses the omissions from and distortions in
an outrageous article posted on PPSI’s website in
THE DEPARTURE OF A DEDICATED AGENT
September 2002 concerning the Weiss ratings of
Introduces the article by a 30-year veteran of the
Northwestern, describes the reaction of Weiss Rat-
life insurance business
ings to the article, and describes two other recent
WHY I LEFT THE LIFE INSURANCE BUSINESS postings on PPSI’s website
(BY A VETERAN AGENT)
AN INTRODUCTION TO DR. LONG’S ARTICLE
Describes the life insurance business as it was
when the agent entered the business, discusses Introduces the article by John D. Long
some changes that have occurred, explains some INSURANCE CREDIT SCORING: YES OR NO?
reasons for the changes, and identifies some (BY JOHN D. LONG)
important questions that confront the business
Describes the practices of insurers with respect to
FURTHER SECRECY IN THE CONFIDENTIAL the use of applicants’ credit histories, discusses the
ALLOCATION FORMULA AT PROVIDENT objections registered by consumer activists to the
MUTUAL use of credit scores, presents a response to those
Refers to the sponsored demutualization of the objections, and explains the rationale for that
Provident Mutual Life Insurance Company and its response
subsequent acquisition by Nationwide Financial
INSURANCE AND DISCRIMINATION
Services, mentions the secret formula used to deter-
Explains, in our response to and partial disagree-
mine the number of variable shares distributed to
ment with the views expressed in Dr. Long’s
each policyholder in the demutualization, explains
article, the meaning of expressions such as “fair
that the failure to break down the number of
discrimination” and “unfair discrimination,” identi-
variable shares allocated to each policyholder who
fies some discrimination factors, mentions the
owns more than one policy constitutes an added
importance of sociopolitical issues, and discusses
dimension of secrecy, summarizes the responses to
individual repricing on renewal
a survey we conducted illustrating some strange
results of the secret allocation formula, and men- AN UNSUCCESSFUL SURVEY ABOUT
tions the Canadian approach under which there are EXPENSING STOCK OPTIONS
no strange results Presents the letter written by John H. Biggs, chair-
man and chief executive officer of The Teachers
FROM THE MAILBAG
Insurance and Annuity Association of America and
Comments by Larry Redden, John F. Ocwieja,
the College Retirement Equities Fund, to about
Michael Burrill, two unnamed individuals, and
1,700 publicly owned corporations urging them to
Jerry N. Grove
consider accounting for stock options as an ex-
BELATED 2001 COMPENSATION DATA FROM pense, describes our survey of 113 publicly owned
THE NEW YORK INSURANCE DEPARTMENT insurance corporations and 41 mutual insurers on
Presents data, based solely on exhibits filed by life the same subject, and describes the small response
insurance companies with the New York insurance we received to our survey
Copyright © 2002 Insurance Forum, Inc