During his year as president of the Association for Advanced Life Underwriting, Bob Plybon has become a real Washington, D.C., insider.
“I thought something here and there would pop up that would require my attention,” he said in an interview with National Underwriter. “I didnt expect this would become my second residence.”
It has been a particularly challenging year for Plybon and the AALU, with issues ranging from corporate-owned life insurance, the estate tax, nonqualified deferred compensation and split-dollar all occupying prominent positions on the agendas of Congress and regulators.
And as Gus Comiskey Jr. takes over the gavel as AALU 2004-2005 president, he knows things will not get any easier.
Because 2004 is an election year, some people may believe Congress will not consider legislation affecting AALU members, says Comiskey, but history suggests otherwise. “In 16 of the last 17 election years, we have had tax legislation.”
Plybon says the vast majority of issues that arose during his tenure as president are still in play.
“We have a bunch of issues wed like to bring closure to,” Comiskey adds.
Plybon says AALU and the rest of the life insurance industry are organizationally much better situated to take on the issues than ever before, due in large part to the new spirit of unity in the industry. “For the first time in 30-plus years, we have the ability to bring together the entire industry to speak with one voice on most issues,” he says.
AALU, he notes, has joined with the National Association of Insurance and Financial Advisors and the American Council of Life Insurers in a coalition to allow the organizations to work for their members in the most favorable way.
This was demonstrated most notably in the battle over COLI in the Senate Finance Committee, Plybon says. The associations, he says, work constantly to educate members of Congress and their staffs that concerns over COLI involve older policies that are no longer sold.
“We try to paint a view of who we are,” Plybon says. “We try to do a better job of educating members and their staffs about what we do and how the product works.”
Comiskey adds that in the past, the life insurance industry was fragmented, but now AALU, NAIFA and ACLI are trying to present a united front with a commonality of reasoning.
Five years ago, Plybon says, the industry had no central voice. No one was speaking for the entire life insurance industry, he says, and there were disagreements between those at the company level and those at the distribution level.
Moreover, Plybon says, NAIFA lost part of its membership.
But now, he says he thinks the industry has turned the corner. “Were stronger now, but we are still not where we need to be.”
Comiskey adds that AALU is working to get more of its members involved in government relations. AALU now has an organization called Impact, which aims to teach AALU members how to relate to Congress and congressional staff.
Indeed, Comiskey says, more than 100 AALU members were set to attend a session during the annual meeting to participate in a program on how to develop better relationships on Capitol Hill.
Plybon says this should come naturally for AALU members. “Our business is relationship building,” he says. “Impact gives us the opportunity to let members know they can use those same skills to develop relationships with policymakers.”
The life insurance industry, he says, is under attack, not only because of some misleading articles written about COLI but also because Congress needs money due to the deficit.
“That is one of the major reasons why the groups have galvanized together,” Comiskey says. “We promote the legitimate uses of life insurance.”
Life insurance, he says, is about protecting widows, orphans, businesses, employees and families. Congress, Comiskey says, has always favored the cash buildup of life insurance. “It is good for the economy and good public policy.”
Comiskey says that during his tenure as AALU president, he plans to focus on 4 major issues. The first, he says, is reform, rather than repeal of the estate tax. If the estate tax exemption is raised to $2.5 million per person, he says, it would eliminate the estate tax for 99.6% of all families. “We think that is very fair for all Americans.”
Plybon adds that in addition to eliminating the tax for 99.6% of American families, raising the exemption to $2.5 million would also virtually eliminate the revenue loss to the Treasury.
The second issue he wants to resolve during his term is COLI, Comiskey says, and AALU is eager for Congress to pass the COLI amendment approved by the Senate Finance Committee, which represents the best practices in the industry.
The third issue is nonqualified deferred compensation, he says, and AALU supports the NQDC proposal developed by House Ways and Means Committee Chairman Bill Thomas, R-Calif.
The fourth issue, according to Comiskey, is a relatively new one and is playing out in several states. Specifically, he says, some people are trying to expand insurable interest laws in ways that go beyond the traditional interests of families, businesses and charities.
AALU believes these proposed changes are not good public policy, Comiskey says, and could produce a backlash. “We are very opposed to insurable interest laws that do not meet the test of good public policy.”
For all the challenges facing the life insurance industry, both Comiskey and Plybon believe it can offer people an outstanding career opportunity.
“The potential is phenomenal,” Comiskey says, “but it is not for everyone.” It takes a certain personality to succeed, he says, someone who is a self-starter and who can find creative solutions to problems.
But, Comiskey adds, life insurance agents will also be told “no” a lot of the time.
Plybon notes that there are fewer people in the business now than 10 years ago but that the market is significantly larger.
It is a difficult business; it is not easy to get started, he says, but the income potential is unlimited.
There is a saying, according to Plybon, that successful life insurance agents are probably underpaid relative to the hours they put in during the first 5 to 10 years in the business. But then, he says, they are overpaid for the rest of their lives.
Reproduced from National Underwriter Edition, April 30, 2004. Copyright 2004 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.