To The Editor:
I have been acquainted with Jack Bobo and his thoughtful ideas about the life insurance marketplace for many years. He is experienced and balanced. When he asked Why IMSA? in his June 10 National Underwriter column, I felt he raised a reasonable question. The issue concerns peoples faith in their institutions.
Brian Atchinsons June 24 response concerning IMSAs “demonstrated commitment to high ethical standards” doesnt answer the question about whether the member companies have all met the marketplace standards as measured by the independent assessors. Mr. Bobos question needs to be answered: “Have any IMSA members been expelled or censured for violations?” And, how are the assessors selected and tested to make certain they are qualified? Their independent research and investigative skills must be completely out of carrier influence of any kind.
Following in this line of open discussion, I have some questions about IMSAs requirements for home office administration systems offering post-sale variable universal life service. LIMRA International reported VUL had 38%, the largest percentage, of 2001 market share measured by annualized premium.
I have sold variable life contracts since 1984 and been influenced by the research and writing of Ben G. Baldwin. His revised edition of “The New Life Insurance Investment Advisor” is a standard resource for agents, home office training and consumers. Mr. Baldwin explains that the net amount at risk (particularly if Option #2 or B is driving an increasing death benefit) can get very expensive, as the insured grows older. When you add up the COI, tax costs and fees in the contract, the drain on reserves can be of concern in a volatile market environment. An unexpected lapse would trigger a 1099-R and potential phantom income.
Mel Todd, president and CEO of the Todd Organization said in the June 24 issue of NU, “Clients today demand real-time access to account values. They expect to be able to obtain such information from their personal computer and have these account values viewable with other retirement portal data.”