For the first half of 2016, New York Life reported a three percent rise in individual recurring premium life insurance sales through agents. (Photo: Thinkstock)
New York Life disclosed today record sales of life insurance by agents through the second quarter of 2016, as well as solid growth in sales of income and fixed annuities, and long-term care insurance.
The mutual life insurance company reported a three percent rise in individual recurring premium life insurance sales through agents, compared with the first half of 2015, and an 11 percent jump in whole life sales.
Related; Report flags top 5 threats facing insurers
“Recent market volatility is a continual reminder of the lessons learned following the Great Recession: lifetime savings can quickly be put in jeopardy, deeply impacting and threatening financial futures. These are the types of worries our more than 12,000 agents hear from families and businesses every day.
“While many players in the industry are facing turmoil and working to change their business model or make bolt-on acquisitions, our agent force remains focused on one thing: addressing and responding to the needs of consumers looking for insurance and financial guidance,” says New York Life Senior Vice President and Head of Agency Mark Madgett in a press statement. “That dedication and commitment is giving New York Life momentum in categories that some of our competitors do not have.”
New York Life already has hired more than 1,500 new agents through the first half of 2016, 68 percent of which are women or individuals who represent cultural communities. The company is on pace to mark its tenth consecutive year of hiring more than 3,200 agents.
Sales of income annuities — single premium immediate annuities and deferred income annuities — are up 22 percent and fixed deferred annuities are up 12 percent compared to the same period last year.
A 2016 LIMRA report pegs New York Life’s market share of single-premium immediate annuities (SPIAs) at 28 percent and deferred income annuities at 33 percent. LIMRA also ranks the mutual insurer as the third largest individual long-term care provider by market share, having placed $12.7 million of new premium in the first half of 2016, a 62 percent year-over-year growth rate when compared to the same period in 2015.
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Password breach could have ripple effects well beyond Yahoo
Haul of password data could be used to open locks up and down the web.
Raphael Satter, The Associated Press on September 27, 2016
As investors and investigators weigh the damage of Yahoo’s massive breach to the internet icon, information security experts worry that the record-breaking haul of password data could be used to open locks up and down the web.
While it’s unknown to what extent the stolen data has been or will be circulating, giant breaches can send ripples of insecurity across the internet.
“Data breaches on the scale of Yahoo are the security equivalent of ecological disasters,” said Matt Blaze, a security researcher who directs the Distributed Systems Lab at the University of Pennsylvania, in a message posted to Twitter .
A big worry is a cybercriminal technique known as “credential stuffing,” which works by throwing leaked username and password combinations at a series of websites in an effort to break in, a bit like a thief finding a ring of keys in an apartment lobby and trying them, one after the other, in every door in the building. Software makes the trial-and-error process practically instantaneous.
Credential stuffing typically succeeds between 0.1 per cent and 2 per cent of the time, according to Shuman Ghosemajumder, the chief technology officer of Mountain View, California-based Shape Security. That means cybercriminals wielding 500 million passwords could conceivably hijack tens of thousands of other accounts.
“It becomes a numbers game for them,” Ghosemajumder said in a telephone interview.
So will the big Yahoo breach mean an explosion of smaller breaches elsewhere, like the aftershocks that follow a big quake?
Ghosemajumder doesn’t think so. He said he didn’t see a surge in new breaches so much as a steady increase in attempts as cybercriminals replenish their stock of freshly hacked passwords. It’s conceivable as well that Yahoo passwords have already been used to hack other services; the company said the theft occurred in late 2014, meaning that the data has been compromised for as long as two years.
Meanwhile Yahoo users who recycle their passwords across different sites may be at risk. And while an internet-wide password reset is one option, Yahoo’s announcement that some security questions were compromised too means that the risks associated with the breach are likely to linger.
A password can be changed, after all, but how do you reset your mother’s maiden name?
People often take high risk ratings and coverage rejections personally. So how can you decrease the likelihood that an underwriter will penalize your client? (Photo: iStock)
Well, this is awkward: Your client agreed that he needed additional life insurance. You submitted the application, and then your client learned that he won’t qualify for preferred rates, which was the amount that fit his budget. Instead he’s been rated as a higher risk, and the annual premiums are much higher than you two had discussed. The client understands that it’s not your fault. But you’re still concerned the incident has strained the relationship.
Related: The advisor’s role in financial underwriting
“People take personal offense to ratings, or worse yet, declinations, because they feel like it’s almost an attack on their person,” says Kevin Meehan, CFP, ChFC, with Wealth Enhancement Group in Itasca, Illinois. But, the reality is that many clients develop health conditions as they age that negatively affect their status as life insurance applicants.
How can you decrease the likelihood that an underwriter will penalize your client? It’s possible to do this by providing the additional details required to help that underwriter make a better informed decision.
Conduct more focused interviews
Meehan’s firm has clients complete a standardized form requesting health details before they approach any of the life insurance brokers with whom they work.
Similarly, Million Dollar Round Table member Brendan Walsh with Catalyst Solutions Group in Birmingham, Michigan, starts by asking higher-level health-related questions: date of birth, tobacco usage, any health issues in the past five years that might be a red flag for underwriters? These questions give him an initial sense of any potential problems. “We’re going to do some pre-underwriting,” he says, “to see if we might be running into any issues in the underwriting process or if there’s anything for which we need to prepare in advance.”
If a potential underwriting concern comes up, Walsh digs deeper. He cites a fairly common example of skin cancer. In those cases, he’ll ask about the diagnosis dates, treatments, any medications, how long since the client has been out of treatment, and so on.
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An informal, “pre-underwriting” survey can help decrease the likelihood that an underwriter will penalize your client. (Photo: iStock)
Informal inquiries
Using that information, Walsh can call an underwriter at a carrier with whom he has a good relationship to get their informal opinion on the case’s underwriting challenges. He frequently also suggests to clients that they approach prospective insurers through an informal inquiry.
“We’ll fill out an informal inquiry questionnaire,” he explains. “We can then disseminate (the questionnaire) to a number of different carriers so that we can get some firmer ideas of how they might be underwritten before we even actually go through a blood and urine sample and complete formal underwriting.”
Walsh has found that clients and prospects, especially those with any history of health problems, appreciate this approach versus moving directly to a formal application. These applicants are often apprehensive about the process, he says.
“I think it really helps assuage some of those concerns because it’s soft underwriting without actually going in and getting a hard decline or a hard rating from a carrier,” says Walsh. “We can get a good sense of what we’re going to see and how carriers might treat that.”
Mitchell Kraus, CFP, CLU with Capital Intelligence Associates in Santa Monica, California, also drills down before submitting a formal application. If he spots a problem, he then contacts different insurers to learn how they would handle the application.
He describes a recent case in which two applicants in a family were recreational marijuana users. After reviewing policy illustrations, he contacted the insurers to learn how they would treat the usage and found one that would still issue at preferred rates. “Knowing that, the clients were much more open in the exam process as they knew they could tell the truth and we got both cases approved preferred,” he says.
See also:
10 things to know about whole life insurance
10 timely life insurance riders
Additional details can make the difference between facing a satisfied client or an embarrassing client conversation. (Photo: iStock)
Details are good
Both Meehan and Walsh emphasize the importance of supplementing the application with additional detail when it makes sense to do so. Although Meehan doesn’t do that for more routine-underwriting policies, he does provide it when the amounts involved are large relative to the applicant’s income or when the policies are supporting business purposes like deferred compensation or business continuation. “The more sophisticated the case becomes, the more written information and financial information you may want to provide the insurance company so they know that there is an insurable risk to address,” Meehan suggests.
See also: 10 benefits of fact-finding
Walsh takes a similar approach. His experience has been that the more information he can provide, the better, because the additional details help underwriters flesh out the profile they build. He usually provides that information with a cover letter and he or someone from his staff often follows up on the application to learn if the underwriter can use additional insights.
An underwriter is given “one shot” to come up with a correct assessment and any additional information an agent can provide helps, says Tom Farrell, vice president, life underwriting, Prudential Individual Life Insurance in Newark, New Jersey. Farrell strongly advocates the use of a cover letter with the policy application, even if the case does not appear to be unique. Why? A cover letter is an opportunity to provide additional background information to the carrier and the underwriter, he says: “Tell us what you want us to know. Why did you sell insurance to this person? What did you discuss? If there is a health impairment, dig a little bit deeper and ask some questions to try to help the underwriter out. So, I urge them, even if it’s not unique, to try to submit a cover letter on every case.”
Farrell cites a hypothetical case in which the advisor learns the applicant has a history of diabetes. Possible follow-up questions could ask, for example, if the applicant is following doctor’s orders, frequency of doctor visits, glucose monitoring, exercise habits. That information would help the underwrite evaluate a case. It’s not necessary for the advisor to dig too deep, though, he adds, because the insurer will request medical records and the underwriter will assess the case based on those records.
Agents can also protect the insurance company at this stage and improve relations with underwriters, Farrell adds. He recalls a case in which the agent knew that the applicant was a smoker, but the applicant refused to disclose that in the application. The agent included a cover letter that informed the insurance company of that habit. “While it didn’t help him with the case, it helped the company and the relationship aspect between the underwriter and the producer was enhanced in that situation,” he says.
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Why consumers’ attitudes toward life insurance are changing
The list of preventive services that women can receive without paying anything out of pocket under the health law could grow if proposed recommendations by a group of mostly medical providers are adopted by federal officials later this year.
The draft recommendations, which are open for public comment until Sept. 30, update the eight recommended preventive services for women. That list was developed by the Institute of Medicine — now called the National Academies of Sciences, Engineering, and Medicine — to build on existing recommendations and fill in gaps that weren’t addressed in the health law. Under the IOM list, which took effect in 2012, most health plans are required to cover well-woman visits, screening and/or counseling for sexually transmitted infections, domestic violence and gestational diabetes as well as breastfeeding support and supplies.
In addition, most health plans must cover, without cost sharing, all methods of contraception that have been approved by the Food and Drug Administration. That controversial requirement led to numerous lawsuits by religious institutions and employers that object to providing such coverage, including several cases that reached the Supreme Court.
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When it developed the initial list, the IOM advised that the guidelines be reviewed and updated at least every five years in order to stay current with scientific evidence. This year, the review panel also weighed in on breast cancer screening, coverage of follow-up testing or procedures as part of the preventive services and male methods of birth control.
The proposed new recommendation would allow women at average risk for breast cancer to begin screening as early as age 40 and receive a mammogram every one or two years. That is a more liberal standard than the guidelines that insurers rely on for free screening from the U.S. Preventive Services Task Force, which recommends women generally be screened every other year starting at age 50.
“We have really confused the heck out of women,” said Dr. Hal Lawrence, executive vice president and chief executive officer of the American Congress of Obstetricians and Gynecologists. “Do I start at age 40, do I start at 50, do I do it every year or do I do it every other year? We wanted to get some uniformity.”
ACOG was awarded a 5-year grant to manage the review process, working in conjunction with a steering committee of nearly two dozen provider groups from different women’s health disciplines.
In addition to the breast cancer screening itself, the ACOG working group proposes that if imaging tests, biopsies or other interventions are required to evaluate the mammogram findings that those be considered an integral part of the screening, which would mean they would be provided without charge to women.
Such follow-up care emerged as a theme from the panel: If additional testing or procedures are necessary following a preventive service, it should be covered as part of the service. The recommendations also clarify that some of the preventive services may require more than one visit and provide other specifics on coverage requirements.
“It’s critically important for plans and people to recognize that the well-woman visit [required under the current guidelines] could happen in multiple places and require multiple visits,” said Mara Gandal-Powers, senior counsel at the National Women’s Law Center, which participated in the ACOG working group. “If you’re a woman who needs a Pap test and a colonoscopy, you’re probably not getting them from the same providers and you’re hopefully not getting them at the same time.”
The recommendations’ specificity is important: The original IOM guidelines left implementation details vague, leading to scuffles between patient advocates and insurers over precisely what was covered, and that ambiguity required ongoing guidance from the federal government. For example, if a plan covers oral contraceptives without cost sharing, could it charge for other hormonal methods such as the contraceptive patch? Answer: No.
“It’s helpful to get the real-world piece,” said Dania Palanker, assistant research professor at Georgetown University’s Center on Health Insurance Reforms. “For insurers, what do we mean when we say you have to cover a service?”
A spokesperson for America’s Health Insurance Plans said that the trade group will likely submit comments on the proposed recommendations and declined to comment before then.
The working group recommended expanding the scope of what’s covered without cost sharing in some important ways. The contraceptive coverage requirement, for example, would cover over-the-counter methods of birth control without a prescription and allow women to receive a full-year supply of contraceptives all at once, which has been shown to improve adherence.
The ACOG group also proposes covering contraception methods used by men, including condoms and vasectomy.
“The best contraceptive method for a woman at a particular time may be her partner,” said Adam Sonfield, a senior policy manager at the Guttmacher Institute, a reproductive health research and policy organization.
The working group will submit its final recommendations to the Health Resources and Services Administration, part of the Department of Health and Human Services, by Dec. 1, and HRSA will make the final decision on adoption of the recommendations. If adopted before the end of the year, they would go into effect for most plans at the beginning of 2018.
Please visit khn.org/columnists to send comments or ideas for future topics for the Insuring Your Health column.
Insurance, Insuring Your Health, Syndicate
Cancer, Contraception, Insurers, Preventive Services Task Force
About half of 315 insurers surveyed globally are looking to increase cash holdings in coming months, up from 36 percent last year.
(Bloomberg) — Insurers expect to slow purchases of high-grade corporate debt and hold more cash over the next two years, potentially squeezing already low returns, BlackRock Inc. said.
“Cash balances are ticking upward,” said Zach Buchwald, head of BlackRock’s insurance asset-management business in North America. “In today’s environment, where every basis point is so precious, within your core fixed income, we want to be investing wisely and generating the best risk-adjusted returns we can, and a large cash balance doesn’t help.”
About half of 315 insurers surveyed globally are looking to increase cash holdings in coming months, up from 36 percent last year, according to a BlackRock study released Monday. Companies have been stung recently by alternative investments such as hedge funds, and have been turning to other illiquid assets such as real estate, infrastructure and timber to generate returns as interest rates have remained persistently low.
The appetite for risk declined since last year, BlackRock said. Only 21 percent of companies surveyed plan to boost allocation to investment-grade corporate credit, compared with 45 percent last year, as investors anticipate deteriorating credit conditions, BlackRock said.
‘Very skeptical’
“Insurers are really struggling and they’ve been struggling for a very long time, and I think we’re also now past the period where there’s an expectation that rates are going to start rising meaningfully,” Buchwald said in a phone interview. The decreased desire to boost bets on high-grade credit “is the indication that insurance clients are getting very skeptical about the state of the corporate credit market.”
Companies have been turning more to alternative assets amid central bank easing that has limited returns on other investments. American International Group Inc. and TIAA are among firms that have have expanded into direct lending to generate higher returns, while MetLife Inc., the largest U.S. life insurer, said its commercial real estate loans reached a record $14.3 billion in 2015.
As more insurers cut hedge-fund investments, they are increasing allocations to private equity. About 49 percent of firms surveyed saying they plan to boost such bets, up from 27 percent last year, BlackRock said.
‘Good performer’
“Private equity has proven to be a good performer, and in some cases, sort of an outperformer,” Buchwald said. “As insurers have gotten more comfortable with taking illiquidity on their balance sheet, private equity has played a larger role.”
While cash is safe and offers flexibility, it may hinder the insurers’ already-pressured portfolio yields, BlackRock said. And with low rates and market volatility coinciding with a need to generate higher returns, those firms need to move cautiously, BlackRock said.
“It just makes you have a tougher risk-management lens as you’re thinking about your investments,” Eric Kirsch, chief investment officer at Aflac Inc., said in the report.
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Iowa braces for flooding with more rain on the way
The river is expected to crest Tuesday in Cedar Rapids.
The Associated Press on September 26, 2016
The river is expected to crest Tuesday in Cedar Rapids, Iowa’s second largest city with a population of about 130,000. Officials there warned people to evacuate downtown areas of the city near the river by 8 p.m. Sunday.
“We have emergency personnel that can help you if needed,” Cedar Rapids Mayor Ron Corbett said Saturday. “They’ll risk their lives for you. But we don’t want them to risk their lives.”
At the Cedar Valley Montessori School in downtown Cedar Rapids on Friday, about 100 volunteers from area high schools helped move all the school equipment above the ground floor.
Stacy Cataldo, head of the Montessori school, told television station KCRG that many remember how flooding damaged the school in 2008 and don’t want that to happen again.
“We’re applying those lessons as we move forward,” she said.
Just upriver in the small town of Palo, about 100 homes in low-lying areas were evacuated Saturday.
Mayor Tom Yock told the Des Moines Register that volunteers and work crews scrambled Saturday to protect as much as possible of the town, which was devastated by record flooding in 2008.
Many people moved their belongings to the upper levels of their homes and built sandbag barriers before evacuating, he said.
Storm centred about 1,207 kilometres west-southwest of the southern tip of Mexico’s Baja California peninsula.
The Associated Press on September 26, 2016
Tropical Storm Roslyn has formed in the Pacific far off Mexico’s coast.
The storm’s maximum sustained winds early Monday are near 64 kph with little change in strength expected during the next two days.
Roslyn is centred about 1,207 kilometres west-southwest of the southern tip of Mexico’s Baja California peninsula and is moving north-northeast near 8 kph.
Insuring Your Health
