* Jim Benson former CEO of New England and top MetLife executive will be acting CEO of NAIFA.
* Goal of 100,000 members by the year 2005.
* The primary mission: advocacy on behalf of the agent/financial advisor and the delivery of products and services that help members build their businesses.
* The driving focus of all efforts is delivering value to the individual member.
* Ensure that there is ongoing relevance at the local level, and that the state and national levels run lean and efficient operations.
* Individual benefits were identified (outside of the area of advocacy) that bring value to the local association member.
* More modeling in the areas of finances and membership.
* Re-engineer, under the current structure, our overall NAIFA operation.

NAIFA members can go to www.naifa.org for details and updates.

HMOs, DOCTORS AND LAWYERS – Looks like the next big issue in the 600,000 doctors versus the HMOs will be whether "discovery can proceed."  Aetna, Cigna and other HMOs will appeal a Florida federal judge's ruling that doctors are a 'class' for lawsuit purposes and are seeking to stop the doctors' lawyers from obtaining "virtually every piece of paper that companies have generated in the last 10 years." Why do lawyers like these "class action suits"? Well, do the math...damages of $10,000 per doctor makes a $6 billion (yes billion!) settlement possible. That means each doctor will get the huge sum of about $6,000 and a few attorneys will share about $2.4 billion. There is something very, very wrong with this picture...more litigation tax for us to pay.

LILI LOSSES – U.S. insurers could pay $600 million in claims to victims of Hurricane Lili, according to a preliminary estimate by the Insurance Information Institute. Hurricane Isidore, which made landfall as a tropical storm, caused an estimated $100 million in insured losses. These insured losses from Hurricane Lili are modest relative to recent natural disasters --Tropical Storm Allison alone caused $2.5 billion in insured losses last year.

CONSECO – According to the Wall Street Journal, bondholders of Conseco won the resignation of Gary Wendt as CEO and are apparently seeking full ownership of the company. The company is expected to attempt to restructure more than $4.5 billion of debt, through a Chapter 11 bankruptcy. Since debts exceed the company's value, the bondholders probably gain a controlling stake in the restructured company and are demanding full ownership.  Investor lawsuits are also beginning.

FIRE FIGHTERS, POLICE AND LIFE INSURANCE – The International Association of Fire Fighters and the Fraternal Order of Police are appealing to Congress to support the inclusion of provisions to protect their members' access to group life insurance coverage for acts of terrorism in the "Terrorism Risk Insurance Act."  The legislation, however, remains bogged down in Congress with House and Senate negotiators unable to reach a compromise on the issue of legal liability.  Meanwhile, failure to pass an insurance "backstop" is reported to be delaying building projects, resulting in lost jobs.

CITIGROUP'S SALOMON – Former Citigroup telecommunications analyst Jack Grubman will apparently aid investigators in showing that executives of Citigroup's Salomon Smith Barney prompted him to provide optimistic reports on certain telecommunications stocks. Among the issues is an allegation that Citigroup Chief Executive Sanford "Sandy" Weill demanded a positive review for AT&T...a large banking client of Citigroup.
 

Continuing Education Tutor is pleased to announce the release of its first CE course dedicated to the "lost art" of field underwriting. The title of the course is Impaired Risk Advocacy for Clients with a History of Hypertension, which is approved for three hours in over 40 states. We have found in our focus groups that agents and support staff want to take these courses for the following reasons:  * To improve their professional competency  * To improve their skills in screening of cases  * To find out more about a family member's heath  * To find out more about their own health  We were not surprised by this, given that 75 million Internet users in North America access the Internet for medical information for themselves and their family.  You can find the course at  http://www.continuingeducationtutor.com.  Continuing Education Tutor Providing a New Generation of CE Courses to the Life Insurance Industry  http://www.continuingeducationtutor.com 818-591-3882

MORE ON ANALYST PRESSURE - Merrill Lynch's actions that resulted in a $100 million settlement with New York State for misleading investors with biased and overly bullish research is apparently not an isolated incident.  Credit Suisse First Boston is now in the spotlight...potentially a criminal one. Investigators have found e-mails in which top bankers for CSFB decided to start issuing analyst reports on a company that had paid them investment banking fees. The company involved is Research in Motion, maker of the BlackBerry e-mail device.

SMOKING GUN E-MAILS – Many modern day "desperadoes" are being done in by their e-mails. Investigators in the banking and research functions of Wall Street are finding treasure troves of "smoking gun" documents in e-mail exchanges. E-mails don't shred as well as paper. Reuters is reporting that a recent Merrill Lynch memo stated, "Before sending an e-mail or leaving a voice-mail message, ask yourself: 'How would I feel if this message appeared on the front page of a newspaper, was given to my client, or if I had to explain it in court or to a regulator?'"

UNUMPROVIDENT EXPOSÉ – UnumProvident stock has dropped on rumors of a negative "60 Minutes" story on aspects of the company's claims handling process.  The company "believes that the issues behind this story have been carefully packaged with the purpose of generating interest from various media outlets. The origins appear to be two sources: one is a group of plaintiffs' attorneys who are frequently involved in claim litigation against the Company, and the other source is a small group of terminated employees."

MOLD HYPE – According to a new report by the Texas Medical Association, the public's heightened concern over adverse health effects from mold is not supported by medical evidence. The association draws the conclusion that adverse health effects from Stachybotrys mold spores in water-damaged buildings are not supported by peer-reviewed reports in medical literature. This is pretty stunning when you consider what mold claims and law suits have done to the Texas insurance market.

BUSINESS INTERRUPTION 30% OF WTC CLAIMS – PricewaterhouseCoopers reported that business interruption (BI) losses associated with the September 11, 2001 attack have risen from 25% to 30% of total World Trade Center (WTC) loss estimates. Total overall WTC loss estimates continue to fluctuate, but have been revised down from approximately $70 billion to $40.2 billion.

PRUDENTIAL PONDERS P&C – Prudential is thinking about selling its personal lines property and casualty business. No final decision yet.

HOMEOWNERS EARNINGS – Aon's comprehensive study of the U.S. homeowners insurance marketplace indicates that despite recent rate and underwriting actions, the line cannot reasonably expect to earn its cost of capital. While the personal lines insurance industry's cost of capital ranges from 11% to 13%, the homeowners line is returning only 4.8% on capital.

Get the study (conducted by the Gallup Organization) which shows you:

1. Should you target men or women? 
2. What age to target 
3. Who buys annuities--is it wealthier people or people of modest means? 
4. The one feature that motivates most people to buy an annuity 
5. Which people tend to buy more variable annuities vs. fixed annuities and vice versa 

IRS LIBERALIZATION – In Revenue Ruling 2002-62, issued on October 3, the IRS takes mercy on individuals receiving "substantially equal periodic payments" from qualified retirement plans and IRAs.  Individuals under age 59-1/2 who take substantially equal periodic payments over their life expectancy can avoid the 10% premature distribution penalty tax.  The IRS provides three methods for calculating the payments, two of which result in a fixed amount that must be withdrawn each year.  If the payments are modified within five years after beginning (or before age 59-1/2 if later), the premature distribution penalty tax is imposed on all the prior distributions.  With the steep stock market decline, however, individuals locked into a fixed withdrawal amount may be experiencing a rapid decline in their account balances.  With Revenue Ruling 2002-62, the IRS is allowing individuals to make a one-time change in their payout method for 2002 and future years.  If you have any clients facing this dilemma, let them know the good news.  The complete Revenue Ruling can be found at www.irs.gov (requires the Acrobat Reader). 

STRETCH ANNUITIES – Manulife introduced a series of sales tools and support services for use with clients that are designed to enable financial intermediaries to apply a concept similar to stretch IRAs to annuities. The plan helps reduce the tax burden for beneficiaries as assets are passed through generations. "Stretch annuities may offer investors everything they could want in an estate planning tool - a flexible strategy that helps provide control over the assets, a potentially lessened tax impact for beneficiaries, and finally, the assurance that their legacies will continue to help provide income for generations."  Details at http://www.manulife.com.

HMO PREMIUM TO INCREASE 17% IN 2003 – HMOs will increase renewal rates by approximately 17% in 2003, according to the eleventh annual Milliman USA survey. Responding HMOs also reported that 2002 premium rates were 16% to 22% higher than 2001 premium rates. Rising health care expenses continue to drive up premiums. This is the fifth year in a row that premiums have increased after four years of little or no increase.  The managed care delivery model, despite its past successes, may no longer be the sole solution for controlling costs. Look for movement to Defined Contribution/Consumer Driven (DCCD) health plans to take hold over the next few years. DCCD health plans have the ability to raise consumer awareness regarding health care's true cost.

HEALTH PLAN DECISIONS – The Employee Benefit Research Institute recently released findings on how and why employers make decisions regarding the health care benefits offered to employees.  To read a summary of the findings, go to www.ebri.org.  The report is particularly timely, coming on the heels of a Census Bureau announcement that the number of Americans without health insurance rose to 41.2 million in 2001, an increase of 1.4 million over the prior year.

QUOTESMITH'S DOUBLE DIP – After about seven years of touting the advantages of buying direct on the Net so "no agent will ever call," Quotesmith must have decided that direct sales on the Net are not what they were hyped to be. Apparently needing a new revenue stream, the company decided to bring "new tools and new information services to insurance shoppers and the professional insurance agent and broker community." Our opinion is that there are a lot of other quote engines on the Net being offered by companies that have been "agent friendly" during the entire Internet experience...use them.

BROKERAGE FIRM RECOMMENDATIONS – According to a Weiss study, among the 62 brokerage firms covering companies filing for bankruptcy between May 1 and August 31, 2002, 46 firms (74%) continued to recommend that investors buy or hold shares in the failing companies even as they were filing for Chapter 11. "Given the highly misleading ratings still being disseminated by the brokerage community, it's no wonder investor confidence in the markets remains so low," commented David Lackey, president of Weiss Ratings, Inc. "Although this represents an improvement over the ratings collected in our previous study, Wall Street clearly has a long way to go before genuine reform takes hold."

BANKING ONLINE UP 37.6% IN 2001 – According to a report by eMarketer's, the U.S. online banking population grew 37.6% in 2001 and is projected to continue growing at a robust 23.3% rate. One in every five households is currently banking online.

PENSION RESCUE – Advanced Impact has a new program called Pension Rescue, which provides financial advisors with a way to show clients how to purchase life insurance within their existing qualified plan, typically using pre-tax dollars. "Finding premium dollars is often more difficult than establishing the need for life insurance...much of a client's money may be tied-up in existing qualified plans. Pension Rescue is a powerful concept used to tap dollars "trapped" inside of a qualified plan, and use those rescued dollars to pay for the life insurance. Pension Rescue makes any client with a qualified plan an immediate prospect." More, but it isn't free at http://www.advancedimpact.com.