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February 15th, 2000 Edition
Extra! Extra!
UNDERWRITING: IT'S ALL IN THE MEDICATIONS - There are numerous reasons for life
insurance agents to sign up for RiskTutor. Pharmacy Tutor is at the top of the
list.Go to this link to view a sample of a
medication in Pharmacy
Tutor: http://www.risktutor.com/demo/lanoxin.html.
Note how each medication is color coded to instantly tell you the underwriting
implications of the drug. In addition, the Underwriting Comments tell you what
you need to know to clarify why the client is taking
the medication. Go to this link to
view the various ways you can look up a medication:
http://www.risktutor.com/demo/pharm_tutor_new.html.
Forget the PDR and other unhelpful medical references that were not created for life
insurance agents and their support staff. That is what makes Pharmacy Tutor so
unique and immediately useful. If you only used this one knowledge tool in
RiskTutor, it would cover the price of admission.
RiskTutor, the Agent's Advantage in Underwriting Substandard Cases
RiskTutor, Inc. (http://www.risktutor.com)
The Leader in Underwriting Knowledge Tools
818-591-3882 818-591-0512 (fax)
Industry News
PRODUCER LICENSING MODEL ACT - The NAIC, prodded by federal legislation, has approved a Producer Licensing Model Act that streamlines the state licensing process and allows producers to use their home state license to conduct business in other states. There is a short timeline, however. At least 29 states must enact the law by November 2002 in order to avert implementation of the National Association of Registered Agents and Brokers, a national, semi-autonomous, multi-state licensing clearinghouse.
MOUNTING AN OFFENSIVE - Investment News reports that Hartford Life, the nation's #1 annuity seller, has "come out swinging" against competitors that have been luring its customers away with so-called "bonus" annuities. We reported in the 2/1 E-News that the SEC is investigating bonus annuities. In an application to the SEC, Hartford is requesting approval to make counteroffers to its annuity customers (an exchange to a new annuity contract with a 2% credit of the account balance). While counteroffers are not allowed by SEC rules, there is some likelihood the SEC will allow Hartford and other insurers to offer their customers a new bonus annuity in exchange for clear disclosure of the potential downside (e.g., a new set of surrender charges).
SLOW LEARNERS - A.M. Best believes the next major hurricane to hit South Florida could trigger an insurance crisis similar to the one that followed Hurricane Andrew in the early 1990s. Best is concerned that several Florida-only insurers - heavily reliant on reinsurance and carrying large amounts of the riskiest business in the state - might not survive one or two less catastrophic storms than the $16 billion Andrew. Full article at http://www.ambest.com.
STATE FARM BANK - State Farm made Internet banking available to its employees on January 23 through its State Farm Bank, and is planning to offer banking services to its customers nationwide this spring.
SMALL BUSINESS LIABILITY REFORM ACT - Small businesses may soon be getting closer to relief from costly lawsuits. The House Judiciary Committee recently approved liability reform legislation that would limit small business exposure to punitive damages to $250,000.
REPORT CARD - The Insurance Marketplace Standards Association (IMSA) received mixed grades at the recent Life and Annuities Market Conduct Conference. While most compliance officers credit IMSA with improving the compliance programs of member companies, they also acknowledge that IMSA carries little weight with ratings agencies, regulators and consumers.
LET KIPLINGER SAVE YOU TIME AND MONEY - The average financial services professional spends 150 hours a year searching for information. With more financial sites on the Internet everyday, personal and fast customer service is critical to remaining competitive. Kiplinger's Taming The Paper Tiger software helps you provide both. It works like an Internet search engine for the office. Just type a keyword into the search field and instantly locate the item you are looking for. Insurance and financial advisors use it to find magazine articles, product literature, seminar information, and more. It requires no scanning! Just $79.95. Find out more by calling (408) 734-9494 or click on the following Web link:
MORE OF THE NEVER-ENDING STORY - After collecting $15 million from Prudential, $6 million from John Hancock and $5.5 million from American General, the Florida Insurance Commission ordered MetLife to pay the state $7.5 million to settle allegations that some of its agents "churned" policies to make sales...that is, used the values of existing policies to purchase new ones without policyholders' knowledge. Florida is earmarking the funds for education. Appears to be an ideal fund raiser, but also raises the question of fairness to policyholders and shareholders.
M&A RUMORS - Northwestern Mutual has flatly denied reports that it was interested in merging with or acquiring Milwaukee-based commercial bank Marshall & Ilsley. Meanwhile, ReliaStar is reported to have rebuffed a takeover offer from Wells Fargo for $46 per share. ReliaStar has been pursuing acquisition by a commercial bank, but in the $50 to $55 share range. In pursuit of a bank affiliation, ReliaStar reportedly has also turned down bids from other insurers that exceeded the Wells Fargo offer.
GAY PARTNERS - Citigroup has apparently decided to grant spousal benefits to both gay and straight employees' domestic partners. This is the fourth of the top 10 in the Fortune companies now offering domestic partner benefits. Mobil Oil had a similar policy, but the recently merged ExxonMobil decided to follow Exxon's policy of spousal benefits only for "legally-recognized relationships."
FOREIGN INVESTMENTS - A PricewaterhouseCoopers' study reveals that, in seeking better investment returns, major life insurance companies are increasing their investments in emerging markets and other foreign investments.
TAKING A HIKE - Prudential Securities acquired West Coast investment banker Volpe Brown Whelan & Co. late last year as an entrée into the "dot-com" IPO market. In its 2/7/00 edition, however, Investment News reports that "since the deal was announced, six of Volpe's top equity analysts and two star investment bankers have left." While the turnover has caused shorter-term problems, the new Prudential Volpe Technology Group is expected to recover over time.
CLOSE TO HOME - The small town of Dripping Springs, TX, just west of Austin, is the site of a very nasty legal proceeding. A grand jury has found reason to continue a criminal investigation of endangerment to a child against Farmers Insurance. The investigation centers on a claim that Farmers knowingly exposed a three-year-old boy to a deadly neurotoxic mold. In a related civil suit, the parents claim that Farmers' investigators found Stachybotrys spores in the family home, but failed to inform the family until the mold had caused irreversible health effects.
Extra! Extra!
DON'T MISS THE BIG PRODUCER WORKSHOP - Eight top producers and industry experts will show you incredible formulas for exploding your business in 2000, including:
How to Get Money Out of Retirement Plans Tax Free
How I Sell 400 Long-Term Care Policies a Year
Author and Financial Services Marketing Expert Pete Montoya Shows You How to Become the Preferred Financial Advisor in Your Town
Seminar Expert Larry Klein Shows You How to Pack the Seminar Room Every Time
Father of Telephone Prospecting, Bill Bishop, Shows You how to Close More Appointments by Telephone
Joe Lukacs, Personal Coach to Top Producers, Reveals Success Rituals of Top Producers
March 18 - 19, 2000 in Orlando, Florida
Special Early Reservation Offer
Details at: http://www.nfcom.com/workshop.htm
Or call: 1-800-980-0192, ext. 202
Marketing/Tax Update
FREE MARKETING NEWSLETTER - On how to improve your direct mail results, get more attendance at seminars, have people calling you from a direct response newsletter, get your name in the newspaper and more on building your business.
ON THE TAX/BUDGET FRONT - With President Clinton's fiscal 2001 budget receiving negative Republican reviews, the consensus is that we're in for more budget gridlock this year. Both parties favor doing something about the "marriage penalty" and a prescription drug program. Problem is that they also seem to want to use these issues as weapons against each other. The House passed marriage penalty relief legislation, which also extended benefits to single-income married couples who already enjoy a "marriage bonus." Since it's unlikely the bill will become law without being scaled back, the GOP wouldn't be averse to blaming Democrats for a stalemate. The Democrats are equally anxious to use a prescription drug program against Republicans in the upcoming elections. Finally, there's that ticking time bomb...the alternative minimum tax. Without Congressional action to revise the AMT this year or next, the number of taxpayers hit by the AMT is projected to soar.
FINANCIAL SWISS ARMY KNIFE - while it may not be all things to all people, variable life does more things for more people than any other financial product we can think of.
DAY-TRADING RESTRICTIONS - In order to help protect small brokerages from day-traders' losses, the NYSE and the Nasdaq have both filed proposals with the SEC to raise the minimum balance maintained in an account trading on credit (margin account) from $2,000 to $25,000.
BAD NEWS FOR READERS DIGEST, ET.AL - According to IVANS, nontraditional players may be breaking into the online insurance market, but consumer loyalty is with insurance carriers. A survey indicated less than 5% would buy insurance from a brokerage site and only about 4% from a banking site. Surprising to us was the survey report that, while 36% would buy direct from an insurer's site, only 20% would buy from a "search engine" and only 8% would use an insurance mall. Details at http://www.ivans.com.
WORLD WAR II MEMORIAL - After hearing Bob Dole speak at its annual meeting, NAILBA decided to contribute to the efforts of Senator Dole and others to make this new national monument a reality. They encourage others in the brokerage industry to do the same by making a donation. You can make donations online at http://www.wwiimemorial.com.
GREAT SALES IDEAS - LUTC offers six great sales ideas at http://www.lutc.org/download/index.htm#anchor739954. They are free...check them out. If you want to really see what LUTC can do for your sales efforts, investigate their Virtual Sales Assistant (http://www.lutc.com). Watch for a major announcement about the VSA in our next issue.
INSWEB EXPANSION - InsWeb continues to increase its presence on the Net with several more alliances, the largest of which is an agreement to market through three major AOL brands...Netscape, CompuServe and Digital City. In an obvious attempt to corner the "redneck" market, InsWeb is also now offering insurance via http://www.pickuptruck.com, or is it "pickumuptruck"?
ONLINE DI SEMINAR - Jim McCarty, CLU, RHU, LUTCF, author of the fast-selling new DI sales book, Above the Line, will be interviewed by Ed Morrow, ChFC, CFP, RFC for Practice on Your Practice. This new service from Pavilion.com (http://www.pavilion.com) offers online multimedia training and education for financial advisors. Jim's interview will be online and free in the Pavilion Event Center beginning February 26, 2000 and his book is available at http://fsc.fsonline.com/fsj/mccarty.html.
INSURANCE COMMODITY? - The PIA and other agent organizations are questioning the Conning & Co. report stating that agents are afraid to compete on price alone and "the Internet has made everything a commodity." The PIA points out that most independent agents "shop" the market for their clients, not only for price, but also for features, and that "insurance policies are actually complex contracts involving many different options" which need to be explained and reviewed by agents.
MUTUAL FUND SURVEY - Schwab Mutual Fund OneSource conducted a survey of portfolio managers, chief economists and other senior executives from leading mutual fund companies. Some findings: mutual fund investors have become increasingly knowledgeable about their investments; investors have become less risk adverse; there is a trend toward "less diversification and more performance chasing"; there is increased interest in international funds.
INNOCENT SPOUSE CLAIMS - In 1998 Congress passed a law allowing an "innocent spouse" to obtain relief from the tax debts of a divorced or separated partner. The change has resulted in a backlog of more than 46,000 claims to the IRS, which admits to being surprised and unprepared for both the number of claims and the complexity in determining which ones are legitimate.
TOO EASY - Becoming a millionaire has become too easy. The insurer of ABC's hit game show, "Who Wants to Be a Millionaire," is suing to get out of its contract because the questions are too easy. The London-based insurance underwriters, Goshawk Syndicate, wants "harder questions and dumber contestants."
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