InsuranceNewsNet Magazine May 2010 : Page 13

Protection Act of 2006 that went into effect on Jan. 1. The provision would permit a tax-free exchange from an annuity or life insurance policy into a qualified LTC insurance pol- icy. But despite the promise of potential business throughthisprocess,broker-deal- ers and advisors are noting various road- blocks on these Section 1035 exchanges. The largest challenge with LTCi exchanges is the nonexistence of any single-premium products. Therefore annuity swaps require numerous partial 1035 exchanges in order to pay an annual LTCi premium. Addi- tional issues include product suitability checks,adversetaximplicationsandsuper- vision levels necessary for transactions. NAIC Requires Carrier Review of Fixed Annuities Recently, the National Association of InsuranceCommissioners amended suit- ability regulations to require that all fixed-annuity transactions be reviewed by carriers. This new regulation, which will more than likely pass as a law in every state, will ideally relieve advisors from this responsi- bilityandplace itonthe shouldersof insur- ance companies. The goal is to give advi- sors extra annuity training in addition to forcing carriers to review annuity recom- mendations and record non-recommended transactions. But companies are now requiring advisors to submit longer appli- cations and to apply individual suitability checks or check with the carrier’s home office. This responsibility change may prove to be more burdensome due to the extra paperwork and processes pushed onto the producers. AXA Equitable Fined $1.9M in Violations AXA Equitable Life Insurance was fined $1.9million by theNewYork State Insur- ance Department after a number of viola- tions were discovered. The department uncovered inaccurate or incomplete disclosures on replacement annuity contracts and life insurance transactions from Jan. 1, 2001, through June 30, 2006. Additional infringements during this time period included the use AIG Plans to Repay the Bailout Early American International Group is preparing to pay back its $182.3 billion government bailout loan before the Sept. 16, 2013, due date. AIG was rescued from a complete collapse in 2008 after it was unable to reimburse billions in collateral payments to banks that bought credit default swap protection. In order to free up funds, the company is in the process of selling AIA to Prudential for $35.5 billion and plans to sell Alico for roughly $15.5 billion. To serve on AIG’s board, the federal government appointed former chief executive of E*TRADE Financial, Donald Layton, and former chief execu- tive of Electronic Data Systems, Ronald Rittenmeyer. The Standard & Poor’s rating agency noted the insurer’s solid progress in restructuring its opera- tions and announced an A-minus rating with a negative outlook and raised AIG’s stand-alone credit rating from a BB- to a BB. of unapproved Equi-Vest policy forms, not supplying policyholders with acceler- ated benefit claims information, not main- taining necessary variable annuity claim reconstructiondocuments,andnotacquir- ing applicant written consent before HIV- related testing. NAIFA Appoints Susan Waters CEO The National Association of Insurance and Financial Advisors replaced its previ- ous chief executive officer, John Healy, with Susan Waters, their deputy CEO since October 2007. NAIFA stated that Americans Optimistic, Says Northwestern Poll The latest results collectedfromNorth- western Mutual’s Optimism Barometer show a distinct upward trend in positive outlooks among Americans. And appar- ently some are really rosy with the poll showing a 60 percent year-over-year jump in people who scored at the highest end of the optimism scale. In the first quarter of 2009, only 25 per- cent of Americans scored between 8-10 (out of 10) on the optimism scale. Today, nearly 40 percent scored between 8-10. Additionally, it isnotonly themostopti- Susan Waters Healy left to pursue other opportunities on Dec. 22 andWaters has since been serving as their acting CEO. Waters brings a variety of leadership experience to NAIFA. Her résumé includes past positions such as president of Sextant Consultants, a com- pany focused on association governance. She also has industry experience, having been a licensed broker and an insurance agency executiveVP.She alsoactivelypar- ticipated in and held numerous leadership positions with organizations such as the California Society of Certified Public Accountants (CEO) and the Massachu- setts Bar Association (executive director). mistic among us that sawincreases.Opti- mism shifted up in all categories, leaving only 2.4 percent of total respondents in the “leastoptimistic”category(0-4ontheopti- mism scale) versus 19 percent last year. In terms of demographics, younger respondents skewed slightly less optimistic than other age groups. Compared with an overall average score of 6.8, respondents 17 and younger averaged 6.3, and those 18-20 averaged 6.8. At the same time, older respondents were less likely to strongly agree with the statement, “a person can do anything if they put their mind to it.” Total “strongly agree” responses ranged from 66.7 percent for age 17 and younger, down to 42 percent for 60 and older. May 2010 InsuranceNewsNet Magazine 13

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