WTC ATTACK(S) - The second World Trade Center insurance jury has decided that the WTC attacks will be insured as two occurrences. This ruling may allow Larry Silverstein to receive up to $1.1 billion in additional payments from nine major insurance carriers, notes David Wood, partner of Wood & Bender LLP, one of the nation's leading law firms in insurance policy enforcement. 

NO PAYROLL TAX HIKE FOR SOCIAL SECURITY CHANGES – With costs for President Bush's Social Security transition to personal retirement accounts estimated at up to $2 trillion, the President vowed, "We will not raise payroll taxes to solve this problem." The only solution that leaves appears to be a sharp increase in government borrowing. Fiscal conservatives believe that the President will not be able to meet his deficit reduction pledge and may have "painted himself into a corner" by ruling out tax increases, as well as benefit cuts for current or 'near' retirees. 

"DEAR MR. PRESIDENT: FIX IT!" - It's to be expected that AARP will have a voice in the debate on Social Security reform.  To read AARP's "take" on President Bush's agenda for his second term, click here.  AARP has expressed opposition to the President's plan to privatize Social Security and has unveiled a web site dealing specifically with Social Security reform, located here.

LIMRA SALES RESULTS – LIMRA reports these U.S. 3rd quarter sales results:

• Individual Life Insurance Sales - Following double-digit growth in the first half of 2004, individual life insurance sales lost a bit of steam in the third quarter. Still, a 6% increase in annualized premium for the quarter helped contribute to a 9% increase for the first nine months of 2004 when compared to the same periods of 2003. 
• Group Long-Term Care Sales - New premium for employer-sponsored LTCI plans declined 87% during the first three quarters of 2004 when compared with the same period last year. Excluding the federal plan, sales were relatively flat during the first nine months of the year for the remainder of survey participants.
• Individual Long-Term Care Sales - Compared to the same 9-month period last year, new premium declined 28% as 31% fewer individuals purchased LTCI than had done so during the same period in 2003. Furthermore more than 100,000 policies of the nearly 250,000 new policies sold through September of this year were purchased from 2 carriers.
• Individual Annuities - Total industry annuity considerations increased 3% during the first three quarters of 2004 year-to-date, reaching $169.6 billion. Sales of variable annuities increased 5 percent to $101.2 billion while fixed annuity sales decreased less than 1 percent to $68.4 billion, when compared to the same period last year.
• Individual Disability Income (DI) Insurance Sales - Total new annualized DI premiums increased 6% and the number of policies sold increased 2% for the first 9 months of 2004 compared with the same period of 2003.

SPITZER TO RUN FOR GOVERNOR – No big surprise here but New York Attorney General Eliot Spitzer has announced he will run for governor in 2006, pledging to use the clean-up tactics he aimed at the insurance industry and Wall Street to reform New York's government. Some critics complain the crusading prosecutor tars entire industries when only a few members are at fault, while others say he builds such public cases against companies that they feel coerced to settle rather than fight the charges. 

NASD FINES MERRILL, WACHOVIA, OTHERS - The NASD censured and fined 29 securities firms, including Merrill Lynch and Wachovia, a total of $9.22 million for failing to properly disclose disciplinary and other required information about their brokers more than 8,300 times. This is the largest fine the NASD has ever imposed for reporting violations. 
The NASD also suspended Merrill Lynch and Wachovia from registering new brokers for five business days because of "their many violations and prior regulatory filing problems."

SURVEY OF PROPERTY-CASUALTY EXECUTIVES SUGGESTS NEW BROKERAGE MODEL WILL EVOLVE IN 2005 - A poll of attendees at The Conference Group's 16th Annual Executive Conference for the Property-Casualty Industry found that executives expect changes in brokerage and regulatory models to have fundamental and long-lasting effects on the industry, including downward pressure on industry compensation, with pricing likely to increase. 

HMO PROFITS INCREASE 33% IN FIRST QUARTER 2004 – According to Weiss, the nation's HMOs had a $3 billion profit for the first three months of 2004, representing a $742 million, or 33%, increase over the $2.3 billion earned during the first quarter of 2003. Despite rising health revenues, the corresponding increase in health care spending has forced the industry to operate on a slim profit margin. Although the industry's aggregate profit margin has improved, rising to 3.78%t at year-end 2003 compared to the negative 0.36% margin that HMOs struggled with in 1997, performance continues to lag when measured against profit margins of 8.2%, 5.5%, and 8.3% for the life, accident and health, and property and casualty insurance sectors, respectively.

FRANKEL GETS 17 YEARS, FEDS GET DIAMONDS - Martin Frankel will receive 17 years in prison for masterminding one of the largest insurance frauds in U.S. history...over $200 million from insurance companies in five states. The con man could have faced up to 150 years in prison and $6.5 million in fines but got a lesser sentence for cooperating in the recovery of some of the lost money. Part of the loot recovered so far includes 814 loose diamonds that were auctioned off by the US Treasury. In all about $60 million has been recovered.
 

NO MORE DEFINED BENEFIT PLANS FOR IBM – Recognizing the liability of traditional pension plans, IBM will offer future employees a 401(k) pension plan instead of a fixed pension. Sooner or later public entities are also going to discover that traditional pensions that pay percentages of income based upon years of service are a recipe for bankruptcy in this age of increasing life expectancies.

THE DOG ATE MY NET WORTH – Well not really, but a recent press release from Atlantic Mutual uses the statement to remind affluent individuals of how vulnerable they are to liability lawsuits and drive home the need for umbrella insurance. A dog on the loose, a party by the swimming pool, a teen driver on a Saturday night...these are just a few of the accident-prone situations that can cost a consumer millions in a liability lawsuit. Awards of $1 million or more rose from 9% of all personal injury awards in 1996 to 14% in 2002. If you are in the business of providing advice to the affluent, you would be well served to recommend an umbrella policy for at least $1,000,000. 

BABY BOOMERS OPTIMISTIC BUT WORRIED – The Allstate "Retirement Reality Check" survey reveals that the past year brought a surge of financial and emotional optimism to Baby Boomers contemplating retirement, but they are concerned about health-care costs and the financial viability of government programs such as Medicare and Social Security. Both concerns seem justified to us!

ANNUITY TAX BREAK – Bills have now been introduced in both the House and the Senate that, if signed into law, would reduce the income tax on lifetime annuity income by 50%, with an annual limit of $20,000 on the amount that could be excluded from federal taxation each year.
 

You make contact, they like you, and then they look on the web to find out about you. But they can't find you because you have no website! So they start thinking that maybe you're one of those fly-by-night types, not really legitimate, maybe even a scam artist. When you call, they say “We're still thinking about it.” What they really mean is “We're not sure we can trust you because we can't find any information about you.” Don't lose another sale that you didn't even know about. Build your identity on the web with a Financial Visions website. It includes all the content—articles, calculators, reports, quotes—everything you need as a professional advisor—It's all made easy for you at Financial Visions. Click for details... www.fvisions.com

EMPLOYEES SATISFIED WITH HEALTH PLANS - According to a Watson Wyatt survey, while health care and benefit costs have risen sharply over the past decade, most workers have remained surprisingly satisfied with their employer-sponsored health benefits. The survey found that 61% of workers are satisfied with their health plan, the same percentage as in 1994 and 1999. According to the survey, employees' understanding of the value of their total reward package has increased by nearly 10 percentage points over the last two years.

YEAR-END GIFT - If you or clients have kids with jobs, giving them a Roth IRA is a great gift.  The lesser of $3,000 or what the child earned can be contributed in 2004.

SUPPORT FROM DOCTORS - The American Medical Association is calling for "legislation to provide tax incentives to encourage individuals to save for their long-term care."

WORKSITE MARKETING TO CONTINUE ITS DOUBLE DIGIT GROWTH - In a recent study by Eastbridge, worksite marketing executives said they expect the market to continue to grow at about 10% per year for the next few years. 

DUCK CONQUERS JAPAN - The combined volume of individual insurance policies and annuities for American Family Life Assurance Company (AFLAC) has surpassed that for Nippon Life. This marks the first time that Nippon Life has given up the top spot in both product categories since the end of World War II. But consider what the duck has done for AFLAC...following its introduction in 2000, the duck advertising campaign catapulted AFLAC's brand recognition from 12% to nearly 90%.  AFLAC is now taking steps to develop a campaign that will provide a greater understanding of what the company offers and why it matters. 

CHARITABLE GIVING BENEFIT - American Express Financial Advisors has introduced the Charitable Giving Benefit, a new feature that allows policyholders, upon death of the insured, to give the equivalent 1% of the policy's death benefit, up to a maximum of $100,000, to an accredited charitable organization of their choice at no added cost and without decreasing the amount of the insurance death benefit paid out to beneficiaries.