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To The Editor: We were gratified to read Jack Bobo’s To the Point “IMSA Update” in the Jan. 8, 2007, issue.

Mr. Bobo rightly notes continuing concerns about inappropriate replacement activity. He also suggests that IMSA “could play a significant role” on the issue of replacements through developing replacement standards. In fact, IMSA recently issued new and heightened standards specifically related to replacement activity.

IMSA standards address this important issue by requiring IMSA-qualified companies to maintain monitoring programs to identify inappropriate replacements. The IMSA standards apply to both internal and external replacements. Through IMSA standards, a company is encouraged to consider how its commission policy regarding replacements complements its replacement policies and procedures.

IMSA-qualified companies make a commitment to offering producer training that clearly sets forth the company’s replacement policies and procedures and that provides guidance as to when replacements may be appropriate. IMSA standards also require companies to disclose information necessary to allow consumers to ascertain whether a proposed replacement transaction is appropriate.

In addition, IMSA-qualified companies maintain policies and procedures to review replacement activity. These should include a system for tracking, identifying and addressing deviations from the company’s replacement policies and procedures. Of course, IMSA standards require companies to comply with all laws and regulations applicable to replacement activity.

Brian Atchinson

President & CEO


Bethesda, Md.

To The Editor:

Although Governor Rendell has many good ideas in his proposal, the plan has a disastrous flaw in the financing of health care reform. Recognizing human behavior, no one wants to do things that will cost them more money if they can avoid it. The 3% of payroll “penalty” is an incentive for businesses that currently do not have health insurance for their workers to continue to avoid coverage. As an example, 3% of a $30,000 salary is only $900 per year. This compares to providing a plan that will cost the firm $3,000 for single coverage or $10,000 for family coverage for a worker.

In addition, the design puts good employers at a competitive disadvantage. If they have been trying to do the right thing by providing coverage, they will think twice about continuing a plan. They could drop coverage, raise salaries and in 6 months, just have to pay 3% of payroll into the fund.

There are 2 truths going on today. One is global warming; the other is “crowd out.” Crowd out occurs when well-intentioned government programs replace privately provided and funded health insurance. There are between 10 million and 14 million Americans who are uninsured and are entitled to government programs such as CHIP, state adult plans and Medicaid. The income eligibility for these programs has been raised. The number of people in these plans has increased. But at the same time, the number of uninsured Americans has increased, and the number of people insured privately has also decreased. Crowd out is real.

A better solution is to give businesses and individuals tax credits (not meaningless deductions) to insure privately. By combining business contributions, individual contributions and tax credits, you insure more people, and you reduce instead of increase the burden on financially unsustainable government programs.

Ross Schriftman, RHU, LUTCF, CBC, MSAA

Kistler Tiffany Benefits

To The Editor:

I really enjoyed Jack Bobo’s column in the 1/22 issue. He touches on several fascinating ideas:

- The reliance on rising home values to avoid saving.

- The coming liquidation of assets as boomers cash in their investments. (“If everyone is selling, who is buying?”)

I was fascinated by the “capital transfer” concept and totally agree that in today’s world, this is often being done to increase risk, not lower it!

I agree with the punch line “there is no substitute for a long-term savings strategy,” and I enjoyed the Micawber’s Law example and the line “240 times nothing would equal nothing!”

My one question: How does the 12.4% combined payroll tax (employer and employee) for Social Security get accounted for in the savings equation? This is a hefty chunk of change. I’ve often viewed Social Security as forced savings, but would much prefer allocating those dollars to a personal account where it’s viewed more easily as a real asset–and as private property–versus a promise from Uncle Sam that “someday, you’ll get yours.” That leaves me wondering: In 2040, will I get mine?

Todd Callaway