Art Kraus, chief executive officer of the National Association of Insurance and Financial Advisors for the past three-and-a-half years, is retiring from his post.
A representative of the Falls Church, Va.-based association confirms Kraus is retiring due to personal family reasons.
A date for Kraus departure has not been set, and no information is available on the succession process.
News of Kraus retirement saddened his colleagues in the insurance industry.
“Arts departure will be a substantial loss for the life insurance industry,” says Gary Hughes, senior vice president and general counsel with the American Council of Life Insurers, Washington.
“He has been an extremely effective advocate on behalf of life insurance agents and someone we have always been able to turn to discuss issues of common interest. He is a class act and his presence will be sorely missed,” Hughes says.
Robert Rusbuldt, chief executive officer of the Independent Insurance Agents and Brokers of America, says Kraus had an impact at NAIFA.
Kraus, Rusbuldt says, came in with a vision of where he wanted to take NAIFA and life insurance agents. While association executives dont always get to accomplish all their goals, Rusbuldt says, Kraus had an impact.
“He is a true gentleman,” Rusbuldt adds, “someone I enjoyed working with.”
In other news, life insurers won a major victory in the auditor independence legislation, H.R. 3763, that was recently enacted into law, which could save life insurers millions in unnecessary costs, according to ACLI.
The issue involves a section in H.R. 3763 that identifies certain non-audit services that accounting firms are prohibited from providing to audit clients, says Allen Caskie, senior counsel with ACLI.
Among the banned non-audit services are “bookkeeping or other services related to the accounting records or financial statements of the audit client,” the legislation says.
Caskie says this posed a problem for public life insurance companies, which are required to produce two types of audits: one using Generally Accepted Accounting Principles for the Securities and Exchange Commission and one using statutory accounting for state regulators.
Under the language of H.R. 3763, Caskie says, life insurers could have been required to use two different auditors.
Even though there are differences between GAAP accounting and statutory accounting, he says, there are many similarities.
ACLIs Accounting Committee determined that on the basis of cost-effectiveness, it made sense to have one auditor do both types of audits.
Caskie says ACLI raised the issue with Senate Banking Committee members and staff. While they were sympathetic to ACLIs concerns, he says, there were fears that a fix might be perceived as giving the life insurance industry a special deal.
Even though the Committee understood ACLIs point of view, Caskie says, and wanted to find a solution, it did not want to send the wrong message to corporate America.
ACLI sent a variety of approaches to the committee, he says, but they were all rejected.
Both the National Association of Insurance Commissioners, Kansas City, Mo., and Sen. Chris Dodd, D-Conn., weighed in on the issue and insisted it needed to be fixed.
Finally, the problem was solved by adding language to the legislation that, in effect, defines “statutory audits required for insurance companies for purposes of state law” as an audit service rather than a non-audit service.
Had the problem not been solved, Caskie says, it would have cost life insurers millions and millions of dollars.
Finally, on the 37th anniversary of the creation of Medicare, Karen Ignagni, president of the American Association of Health Plans, is calling on Congress to save the financially troubled Medicare+Choice program.
The creation of Medicare, Ignagni says, is one of the most significant and valuable legislative accomplishments in American history.
“Now, policymakers are confronted with the challenge of how to strengthen and secure this program for future generations,” she says.
“Medicare+Choice is an important starting point for this effort,” Ignagni says.
The Medicare+Choice program allows Medicare beneficiaries to acquire their medical services through health plans.
Ignagni says this enables millions of beneficiaries to have access to affordable benefits and choices that might otherwise be unavailable.
Ignagni says a recent study commissioned by the Kaiser Family Foundation found that the Medicare+Choice program is responsible for allowing some two million beneficiaries to gain access to prescription drug coverage.
This shows the positive impact Medicare+Choice can have if it is fully funded, she says.
With health care costs rising and prescription drug coverage out of reach for many beneficiaries, Ignagni says, policymakers are debating how to preserve and expand access to benefits and choices, including drug coverage.
“As a first step toward expanding Medicare benefits, we must secure existing choices by adequately funding Medicare+Choice for the millions who depend on it,” Ignagni says.
Reproduced from National Underwriter Life & Health/Financial Services Edition, August 12, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.