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June 19, 2013 at 08:50 AM
A bright, 40something friend who is highly skeptical about my own ability to get on in life thrust a piece of paper into my hands yesterday and asked me what on earth it was.
I told him the piece of paper was just an annual report for the annuity that’s funding his employer’s pension plan. His next question was, “What’s an annuity?”
It hit me as I was giving the answers that maybe part of the challenge insurers face in Washington is that a lot of members of Congress and congressional aides are just pretending that they have any idea what an annuity is, or why someone might want disability insurance or long-term care insurance (LTCI).
The new Federal Insurance Office (FIO) is supposed to try to explain what’s going on the insurance industry to the U.S. Treasury Department, and the Treasury Department is supposed to use the information in efforts to monitor and manage risks that could wreck the financial system.
Maybe, in the new FIO report, the FIO Director Michael McRaith and other FIO officials are also starting the process of increasing Washington financial policymakers’ general level of insurance literacy.
Lobbyists seem to have gone to great lengths to keep the FIO from having anything to do with health insurance or LTCI. But the authors of the FIO’s first insurance industry annual report did try to point out that U.S. life and health insurers got about 27 percent of their $645 billion in 2012 premium revenue by selling disability insurance, LTCI products, and other accident and health products.
