LUTC AND THE AMERICAN COLLEGE - Two industry educational and training leaders have announced a new joint project to begin in January 2001. The new program will allow students to obtain CFP and ChFC credits by combining the academic components of the American College and the interactive, study group environment of LUTC. This could be a major step in helping many insurance agents become true financial advisors. Kudos to Dennis Stork, CEO of LUTC, and Sam Weese, President of The American College, for putting together this unique CFP education program.

CITI NEVER SLEEPS - Citigroup is proposing to acquire the remaining portion of Travelers Property Casualty that it doesn't already own. Analysts predict that the Travelers purchase could be just the beginning of a Citigroup P&C insurer consolidation campaign. Citigroup, which is trading at about 20 times 1999 earnings, could use its stronger stock currency to become a powerful insurance consolidator. Safeco, Chubb, CNA and St. Paul Cos. are among those mentioned as potential Citigroup acquisitions.

COOKING THE BOOKS - This from Investment News: "Some of the profits of major financial companies aren't worth the paper they're printed on. Chase Manhattan Corp., Conseco Inc., Axa Financial Inc. and Mony Group Inc. among others are using big gains on risky venture capital investments to boost their bottom lines by as much as 50% even though the profits are yet to be realized."

CORPORATE LESSON #2 - A turkey was chatting with a bull. "I would love to be able to get to the top of that tree," sighed the turkey, "but I haven't got the energy." "Well, why don't you nibble on some of my droppings?" replied the bull. "They're packed with nutrients." The turkey pecked at a lump of dung and found that it actually gave him enough strength to reach the first branch of the tree. The next day, after eating some more dung, he reached the second branch. In a week he was proudly perched at the top of the tree. Soon thereafter, he was spotted by a farmer, who shot the turkey out of the tree.

Moral: BS might get you to the top, but it won't keep you there.

DELAYED DECIMALIZATION - It appears all but certain that the conversion to stock decimal pricing will not take place on July 3 because the Nasdaq cannot meet the schedule. Instead, the NASD has said it will be ready by the beginning of 2001. Since the Securities Industry Association has informed the SEC that decimalization needs to take place on an industry-wide basis, a delay seems likely.

EXECUTIVE SURVEY - A recent survey of more than 200 financial services executives by Andersen Consulting and Life Office Management Association (LOMA) found that they expect 19% of the asset accumulation and wealth protection market to come from the Internet by 2005. (We see a very big difference between asset accumulation and wealth protection and aren't too sure the executives know any more about the future than the rest of us.) However, if this prediction is correct, that still leaves 81% of the market to be sold via traditional channels. Other findings: About 50% of companies expect to have online quotes and application submissions within two years; the vast majority of respondents believe that online distribution will improve the efficiency of financial advisor channels and reduce distribution costs; two-thirds of executives expect products sold over the Internet to be less expensive than products sold through traditional channels. (We don't believe so. In prior articles we have referred to the "Price Myth"...that is, due to the greatly increased competition, the Internet will not reduce the price of insurance products. Advertising and other direct selling acquisition costs will prevent price reduction.)

HMO COMPROMISE? - Reports indicate that Congressional negotiators are making progress toward agreement on an HMO appeals process, a key unresolved issue in the so-called "patient's bill of rights" legislation.

INTEREST RATES VS. MARGIN REQUIREMENTS - The Federal Reserve has been raising interest rates recently in an attempt to curb the so-called "wealth effect" (the tendency to spend more as one's wealth increases) of an "exuberant" stock market. NY Senator Charles Schumer is urging the Fed and SEC to instead raise margin requirements to tackle speculation in the stock markets. Schumer feels that "higher margin requirements would help protect small investors by decreasing the chances of a market crash and a chain reaction of selling by investors trying to meet margin calls."

INTRIGUE - In a recent administrative complaint, Florida Insurance Commissioner Bill Nelson charged that Bankers Insurance Co. attempted to "subvert, manipulate and undermine" insurance regulators and that its management showed a "lack of trustworthiness." The charges stem from alleged efforts by the company to intimidate a state official by hiring a private investigator to pry into aspects of his personal life. The state employee has also brought a civil lawsuit against Bankers. Moving up the East Coast, Prudential Securities obtained an injunction from a New York State Supreme Court judge to block Credit Suisse First Boston from hiring any more of Prudential's asset-backed securities traders. CS First Boston supposedly attempted to lure the entire 35-person Prudential asset-backed group and succeeded in hiring nine senior members of the Prudential group. CS First Boston's actions were apparently in reaction to Deutsche Bank AG's hiring of 12 senior members of CS First Boston's team early in March.

ALLSTATE UPDATE - Allstate says it will open a new client information center later this spring to support telephone and Internet sales of its policies. This follows last year's announcement that it was cutting 4,000 non-agent jobs, reshaping its sales staff and reinvesting the savings in telephone and Internet sales.

ANOTHER THRIFT CHARTER - Kansas City Life has joined the ranks of AIG, Axa, Hartford, New York Life and State Farm by gaining regulator approval to operate a thrift. To be called Generations Bank, the thrift subsidiary will offer a range of banking products through its agents, direct mail and the Internet.

"HYBRID" REGULATION - The Securities Industry Association has endorsed a form of "hybrid" regulation under which one regulator would supervise the activities of securities firms while each stock market would be responsible for oversight of its trading, listing and other market activities.

NAIFA ADDRESSES FINANCIAL ADVISORS - When the National Association of Life Underwriters changed its name to the National Association of Insurance and Financial Advisors, it took an important step on behalf of its nearly 100,000 members. NAIFA has now partnered with Thomson Financial, publishers of Financial Planning magazine and Financial Planning Interactive, for new educational venues. The NAIFA Division of Financial Advisors will hold its first professional education event just for financial services on May 18-20 in Dallas. Go to http://www.financial-planning.com/Advisors_Forum/ for details and online registration.

QUACKENBUSH - California's elected Insurance Commissioner Chuck Quackenbush is in the news a lot...especially lately. The Los Angeles Times reported that he collected political contributions from insurance companies and used them to repay his wife for personal loans she made to her failed state Senate campaign...about $100,000 in total. He is also being sued by foreign insurers for his efforts to make them accountable for Holocaust claims. The insurers are claiming that Chuck is carrying this "extraterritorial" thing a bit too far.