Execs, regulators debate merits of illustration rules, areas that need work
August 23, 2024 by John Hilton
Insurance companies and consumer advocates have wildly different opinions on the efficacy of illustrations used to sell life insurance and annuities.
A state regulator group sought to understand those differences last week during the National Association of Insurance Commissioner’s summer meeting in Chicago. The Life Insurance and Annuities Committee hosted a panel discussion on illustrations with executives from Securian Financial and Athene Life & Annuity.
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Wink’s Moore on the Market: “One issue [with indexed annuity illustrations] is the lack of history with many proprietary indices developed by insurers. A traditional index like the S&P 500 has decades of history to provide consumers with thorough illustrations based on historical performance. Newer indices don’t have that, Adam Politzer with Athene acknowledged.”
Just this morning, I had an indexed annuity illustration cross my desk, from a reputable company- showing a linear 14% return on it.
This is NOT a reasonable expectation for indexed gains, much less consistently so.
Let’s get our stuff together, folks, or someone else will do it for us. -sjm
