MERGER OFF – The Health Insurance Association of America (HIAA) has announced that its planned merger with the American Association of Health Plans (AAHP) is off.  No reasons were given.

VA SALES DIP – Third quarter variable annuity premium was down 8% from the previous quarter.  Reasons cited: rising oil prices, the "dot com" bust and equity performance.  VA sales, however, are still expected to hit another record in 2000.

TRANSITION TO FINANCIAL SERVICES – The market dictates and, increasingly, customers are changing the rules. Many financial customers are asking for full financial services.  The GAMA Foundation has identified three major factors. "First, consumers are increasingly interested in risk management and are shifting away from mortality-driven products. Second, in light of that shift, recruiting and retaining qualified associates will become increasingly difficult for traditional life insurance organizations. And third, although the trend is towards financial services, the higher profit margins are in life insurance products. Strictly transactional approaches, though an easy and profitable option for associates, are not profitable for the agency." The GAMA Foundation, working in conjunction with GAMA International, is introducing a series of practical tools to help individuals implement the research findings. Go to http://www.gamaweb.com, or contact GAMA International at 800-345-2687 for details.
 

NEW MORTALITY TABLES – National Underwriter reports that insurers are pushing the NAIC "to get a CSO valuation mortality table" update in place quickly.  Considering that the CSO mortality tables currently in use are from 1980, an update seems in order to us.

BUDDY SYSTEM – The Financial Planning Association is hoping to attract and retain new members through a "buddy system" approach. The FPA conducted three sessions for 300 chapter officers on the concept. As always, success will depend upon implementation and, to date, four of the 344 FPA chapters have adopted the plan. For details, go to http://www.financialplanning.com/Practice_Management/Associations/20001129100.html

THE WAR IS OVER – Once "Miss Saigon" opened in New York, it was inevitable that New York Life would open in Vietnam. Well, there probably isn't any connection, but NYL just opened a sales office in Hanoi, Vietnam with more than 80 active agents of Vietnamese heritage.

DONE DEAL – Under a plan approved by its shareholders, Aetna is spinning off its domestic health care businesses to its shareholders (to be known as Aetna Inc.) and is selling its financial services and international businesses to ING for a reported $7.7 billion.  The latter has been renamed Lion Connecticut Holdings Inc. and will be merged into a subsidiary of ING.

CFP IN HONG KONG – The CFP Board of Standards and the Institute of Financial Planners of Hong Kong (IFPHK) struck a deal to create a CFP certification program in Hong Kong.

BIND ONLINE – John Hancock will provide temporary insurance, for no extra charge, between the time an application is filed online and the policy is issued. The product is restricted to ages 20 - 49 and amounts of less than $250,000 of term insurance...and no prior medical history, hazardous jobs or dangerous hobbies.

DECEMBER EFFECT – Beware the "December effect" where some brokers engage in churning of assets and asset reallocations cleverly disguised as year-end portfolio rebalancing. See FPI for details about "a new service which could allow financial planners to track their executing brokers and also allow clients to watch you if brokerage is part of your business." http://www.financial-planning.com/Practice_Management/Broker-Dealer/20001208103.html

INCREASES – As a reminder, the Social Security tax base is increasing from $76,200 in 2000 to $80,400 in 2001.  The standard mileage rate for business use of an automobile is also increasing, from 32.5 cents per mile in 2000 to 34.5 cents per mile in 2001.

MORTGAGE CANCELLATION – Debt cancellation insurance from lending institutions has never been a great deal, but this one may take the cake.  The insurance, known as single-premium credit life insurance, pays off a mortgage debt if the borrower dies, but the premium is financed as part of the house note. Consumer advocates say many people don't know they have the coverage and many have trouble "making the note." Companies say they don't force borrowers to buy the policies, but authorities are taking a dim view of the policies. Some states have outlawed credit life insurance and government agencies Fannie Mae and Freddie Mac no long buy loans with it.
 

PASSING THE BUCKS – In the next 50 years, at least $30 trillion will be passed to the heirs of the Baby Boom generation and their parents...the largest generational transfer of wealth in the history of the United States. A recent Prudential survey found that nearly three-quarters of the people surveyed think it is important that the wealth passed from one generation to another not be heavily taxed. However half admit to knowing "very little" about estate taxation. For Prudential's free brochure, "Estate Planning Strategies for the Future," call 1-800-The Rock, extension 7343.  Of course, the brochure may need updating sometime next year when it seems fairly certain that estate taxes will be changed, if not eliminated.

ANOTHER LIFE/LTC BLEND – New York Life recently announced a product that combines the benefits of life insurance with long-term care insurance coverage. It provides for protection against the rising cost of long-term care, including nursing home care and extended at-home care, while receiving the traditional benefits of cash value life insurance. Basically, it is a single premium universal life insurance policy that allows the death benefit to be accelerated to pay for long-term care expenses.

NEW DISCLOSURE – The SEC is planning to work with the NASD and NYSE in the drafting of new regulations requiring financial analysts who promote stocks in print or on the airwaves to disclose whether they or their investment firms could profit from such advice.

33% JUMP – That's the increase in the number of people seeking securities licenses during the first 10 months of 2000, according to the Securities Training Corporation.

FOOL TO SELL INSURANCE – No, not you! The Motley Fool will start to offer life insurance-related products and services in its new Insurance Center. They have chosen QuickQuote.com to handle the details.