• Convert an IRA to a Roth IRA without the up-front conversion costs!  (for those over age 59, who have an IRA or retirement plan and a taxable income < $100,000)  Perfect for those who want more after tax income from their retirement plan for themselves.

• Grow part of your retirement plan income and estate tax free for your heirs.   (for those who are over 55 and have $250,000 or more in a retirement plan or IRA)  Perfect for those who say, "There's a part of my retirement plan I'll never need. How can I avoid income and estate tax for my kids?"

TERRORISM INSURANCE PROBLEMS – While insurers have assured the government that they are able to pay all claims associated with the September 11 terrorist attacks, the industry is lobbying the government for help with any future terrorist attacks.  With the largely offshore reinsurance firms now insisting on terrorism-exclusion clauses, the U.S. insurance industry and its supporters are sounding alarms that, without reinsurance, insurance companies will be reluctant or unwilling to write policies and, without insurance, companies, real estate and construction projects will be unable to obtain financing. The U.S. insurance industry proposed a reinsurance pool administered by the government and into which insurance companies would pay premiums in exchange for reinsurance (similar to the system used in Great Britain).  The Bush Administration, however, has proposed a three-year plan under which the government would step in for the reinsurers at no cost to the insurance companies, a proposal that is generating considerable criticism.  With many existing insurance contracts expiring on December 31, there is considerable pressure to have a workable solution in place prior to that date.  Stay tuned!

IPO REPORTS – Recent insurance company IPOs have been favorably received by investors.  Principal's initial public offering of 100 million shares priced at $18.50 per share debuted on October 22.  Principal shares closed their first trading day on the NYSE up 13.5%, despite worries about slumping markets.  Shares are currently trading in the $23 range. This was the fifth largest IPO from a financial services company and was followed on October 30 by Anthem's equally successful IPO.  Anthem offered 48 million shares at an IPO price of $36 per share.  Anthem shares are currently trading in the $42 range.  The Prudential IPO, which has been approved by regulators, is scheduled to go within two months and should be a $3 billion deal.

NAIFA EXPANDS BOARD – In order to include a wider range of perspectives and expertise in its governing body, the National Association of Insurance and Financial Advisors (NAIFA) has expanded its Board of Trustees from 17 to 24 officers and trustees. The newly created trustee positions are comprised of a representative from the Association of Advanced Life Underwriting (AALU), the Association of Health Insurance Advisors (AHIA) and GAMA International, plus four at-large selections representing various demographic groups and professional disciplines.
 

GENETIC UNDERWRITING BAN – British insurance companies have voluntarily agreed to a 5-year ban on the use of genetic test results to underwrite risk and assign premium rates. The agreement arose from growing concern that requiring genetic testing could create a "genetic underclass" unable to purchase life insurance and obtain mortgages. However, some DNA test results could still be used if the death benefit exceeds $712,000USD or $427,000USD for a critical illness.

CONFERENCE REVAMPED – The American Council of Life Insurers (ACLI) has revamped its November annual conference to examine how the September 11 tragedy has impacted the future for the financial services industry and its clients.  Detailed information about the conference can be found at http://www.acli.com. 

WAR RISK REVISITED – At least one major law firm is recommending that some companies reevaluate their decision to not apply their policies' "war risk" exclusion to World Trade Center related claims. The insurers' decisions were applauded and, based upon the lack of a "state sponsorship" element in the attack, were generally assumed correct. However, evidence appears to be mounting that the attack was not solely due to Osama bin Laden and his terrorist network.  There is a possibility that "state sponsorship" for the WTC and the recent anthrax attacks will be placed upon Iraq.

MET AND MONY CUTS – MetLife will cut 1,900 jobs, or 4% of its work force, in another round of cuts by the recently demutualized company.  Also facing a difficult market for financial firms, MONY said it would cut 450 jobs, or 10% of its workforce.  All new "stock insurers" can be expected to seek cost savings after decades as mutual companies with no shareholders to whom to answer.

RECOVERY SLOW? – Financial Planning Interactive via the New York Times labels the world economy as being in a "global, synchronized recession" the likes of which have not been seen since the '70s.  Many experts are extending their projection dates for recovery.  Reasons: businesses continue to cut spending, layoffs are growing and consumer confidence is shaky. In fact, consumer confidence is the lowest it has been in seven years. 
 

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ECONOMIC STIMULUS LEGISLATION – The House narrowly passed (216-214) an economic stimulus package on October 24.  The bill includes $3 billion to help people pay for COBRA extended health insurance. Some question whether the federal government should subsidize the premiums, but others argue that annual premiums of more than $7,000 per year are beyond the reach of many of the newly unemployed.  However, about $70 billion of the legislation's $100 billion cost would go to corporations and, according to many commentators, would not result in the short-term economic stimulus needed.  Expect major revisions when the Senate drafts its version of an economic stimulus package.

FREE WORKSITE MARKETING TOOL – The National Association Of Professional Enrollment Specialists/Enrollment Specialists International (N.A.P.E.S./eSI) offers a free utility to request multiple product/multiple carrier worksite marketing proposals. Check it out at http://www.worksite.net.

THE "WORKHORSES" – According to a Conning & Company study, "captive insurance agents, long the key distribution channel for the vast majority of traditional life insurance policies, now account for less than half the premiums paid.  But the big winner in the distribution sweepstakes has not been the Internet.  It has been independent producers, and their control over life distribution looks like it will continue to grow enormously in the foreseeable future." 

NOT MAKING THE GRADE – A recent CIGNA workplace benefits survey reveals that "as consumers struggle to cope with the economic downturn, employers say they're unprepared to provide the retirement-planning information employees need to make informed decisions."  For more information on "Workplace Report on Retirement Planning," click here.
  
"TRUSTED CHOICE" – SAFECO, National Grange/Old Dominion, Encompass and Hartford have signed on as founders of Trusted Choice, a new consumer marketing brand created by the Independent Insurance Agents of America (IIAA). Promotion of the Trusted Choice brand will be accomplished through advertising, public relations, local agency marketing and an innovative website, so that when "consumers think insurance, they will know they need a Trusted Choice agency." P&C agencies can get additional information and sign-up at TrustedChoice.com.
 

CHECKS TO INCREASE – Social Security recipients will receive a 2.6% cost-of-living increase next year, amounting to $22 per month more for the average retiree.  The 2002 increase is down from 3.5% in 2001 because inflation has slowed. 

WAR BONDS, MIXED MESSAGE – Despite public urgings from the
Administration for consumers to spend, it is expected that the Treasury Department will go ahead with the issue of patriotic savings bonds.  There is, however, uncertainty over whether to designate them as "war bonds."

DIFFERENTIATING TERM INSURANCE – Knowledge Digest, by way of Transamerica/Occidental and Conning, reports the following factors insurance companies are using in differentiating themselves in the term marketplace: price, service and distribution, product features and scale and capital. Our thought is that, in the case of term insurance, the price factor looms so large that differentiation may be difficult, if not impossible.

SET ASIDE – Fearing that it might be perceived as anti-consumer, Congress has effectively stopped work on a bill that would have made it more difficult for consumers to dismiss their debts by filing for bankruptcy.  While the House and Senate both passed versions of the legislation in March, it's unlikely that work to reconcile differences in the two versions will take place this year.

HIAA WEBCAST – The Health Insurance Association of America announced that it would broadcast via the Web its November 5 press conference "releasing the findings of a groundbreaking new survey on the growing employer long-term care insurance market."  If you wish to participate, more information can be found by clicking here. 

PET PERK – Pet health insurance is growing as a voluntary benefit for employees of large corporations. MetLife is now offering the benefit to its employees.