Stephen Howard

“What a long, strange trip it’s been.”  – Grateful Dead

The first issue of Broker World was September/October 1980. Fifty-two pages, eight feature articles and 27 advertisers.  The predecessor of this column was simply titled “Welcome…:” and our illustrious founder and sage William Howard explained the decision to launch the first new insurance magazine for agents in 25 years thus: “Our decision to do so was based on the conviction that a factor already significant in the total marketing equation is destined to increase dramatically in importance during the years to come.  The name of that factor is brokerage.”  He continued, “At the present time consumer demands and inflationary pressures are both generating unprecedented diversity of product and, some believe, mandating greater efficiency in marketing than traditional systems afford.”

The lead editorial was by George G. Joseph, CLU, president, Life Insurance Marketing and Research Association, titled Brokerage Today And Tomorrow.  Other articles covered risk underwriting; a panel of experts predicting where life insurance marketing would go in the next decade, the direction of cash value life insurance, and increasing flexibility in life products; Retired Lives Reserve; the advantages of reaching impaired risk clients; a “moral risks” discussion; and an underwriting look at Epilepsy. Ads in the issue included Retired Lives Reserve products, small group, and impaired risk, impaired risk and impaired risk.

In November 1990 editor extraordinaire Sharon Chace reported on a speech by ACLI President Richard Schweiker to the 101st annual meeting of the Association of Life Insurance Medical Directors of America.  Schweiker spoke on the hot topics of the challenges of AIDS and the possible pitfalls of genetic testing. Our intrepid publisher discussed the merits of a BGA serving as many agents as possible and limiting involvement versus nurturing a smaller cadre of agents and providing, as nearly as possible, their every need in the business.  The conclusion? The very best went down both roads at once, attempting to gradually gain credibility, agent confidence and finally commitment through superior service.  Articles covered a variety of substandard and specialty risks in the life, international and disability markets; survivorship life and estate planning for the 90s; and a LIMRA piece outlining the industry’s growth over the past 50 years and eerily outlining where our industry would be in the next 50 years. Companies were advertising annuities with 9.25 to 9.5 percent first year yields or better with one time bonus up to five percent, universal life interest at 9.25 percent, a plethora of group health plans, and there were a bunch of impaired risk ads.

The November 2000 issue saw Ms. Chace announce the selection of two prominent NAILBA members to the LIFE foundation (now Life Happens) board, outlined NAILBA involvement and commitment to the Life foundation and espoused the benefits to both from their association.  Articles again predominantly explored health and impaired risk considerations across the spectrum from agent responsibility to lab results to carrier considerations. Ads featured annuity first year interest rates from 10 to 12 percent, equity indexed annuities, 30 year guaranteed level term, multiple variable product ads, a variety of LTCI ads from carriers who have subsequently exited the business, cigar or pipe as non-smoker…and many impaired risk ads.

November 2010’s underwriting articles focused on the importance of relationships in the impaired risk market, the importance of setting proper expectations, and the ways revamping underwriting and application processing can drive new opportunities.  Sharon Chace examined the beginnings of NAILBA in 1981-82 and the key role SUB-Centers (The Society of Underwriting Brokers) played in it’s formation.  Advertisers offered annuities with (gulp) 3.20 percent first year interest or 2.35 with a five percent premium bonus, indexed universal life, no lapse universal life, lifetime income benefit riders, tech advances creating ease of doing business with carriers, and ads from impaired risk specialists.

This November issue features articles on financial justification; the importance of field underwriting; medically underwritten SPIAs for financing elder care; living benefits to fund experimental cancer treatment; and the underwriting of settlements designed specifically for long term care.  (And this self indulgent stroll down memory lane.)  Ads include indexed annuities, fixed annuity with income rider, indexed universal life, variable life, whole life, term insurance, accelerated underwriting, living benefits, DI, contingency coverage, LTCI, asset-based LTC protection…and impaired risk.

So what’s the point?  Where exactly brokerage is heading is a topic best left for our industry’s sages rather than this silver spooner, but some questions beg asking:  Will our industry see significant recovery from nearly a decade of artificially suppressed interest rates that will allow carriers to again become more aggressive in product design and risk selection? Will SPDAs and SPIAs again enjoy something better than “Yes, but…” status?  Will carriers reenter the mostly abandoned markets of stand-alone LTCI and disability income?  Will our industry step up and re-develop a financially defensible way for brokers to specialize on the vastly underserved middle market and how? In what ways will the race to speed underwriting via tech advances affect the substandard market?  Is brokerage now becoming the dutifully welcomed, increasingly compliant, differently-mothered stepchild of the career system, where comparatively fewer producers means there are enough “just send us your healthy and wealthy” prospects to keep the dedicated more than busy enough to secure a very nice lifestyle and carrier boardrooms comfortable with easily defensible, increasingly conservative risk management?  Will the desire to place protection for the families of the impaired grey and fall away like my once-Prince-Valiant-like luxurious black locks?  Or will brokerage reinvent itself and make the dedicated pursuit to secure protection for all clients rich and not so…healthy and not so…again a challenging but exciting, rewarding, and satisfying lifelong career choice for a new generation of independent insurance producers?

For now, I just applaud each of the brave grey strands that cling to my scalp for another day.[SPH]

“Together, more or less in line, just keep truckin’ on…”

I am writing this column from an undisclosed location, fearing the wrath of the vast, uncountable, tens of protesters gleefully chronicled by the mainstream media marching on cities throughout the country chanting “Not My Editor And Publisher!”  Let them eat cake.

Disregarding, for the purposes of this column, who should or shouldn’t be residing in the Bastille, I chose to attack another media mantra—that of the insurance company, and our industry as a whole, as a greedy, heartless plaything of the one percenters.

I’ve been blessed to be named to the board of the NAILBA Charitable Foundation, where I’ve served for almost four years and have seen firsthand a small fraction of the great generosity our industry possesses for those less fortunate than ourselves. The NAILBA Charitable Foundation is the philanthropic arm of NAILBA. The mission of the NAILBA Charitable Foundation is to encourage volunteerism among NAILBA members and provide grant funds to worthy charitable organizations that serve to enhance the quality of life for those less fortunate, with a special emphasis on children.

Since 2002, Foundation grants have helped charitable organizations in the communities in which NAILBA members live and work.  From 2009 to present the foundation had granted nearly $2 million to worthy charities and the Life Happens Scholarship Program.  $985,000 in just the four years I have served on the board.

Through the generosity of NAILBA members and corporate partners in the past year, the NAILBA Charitable Foundation was able to award $220,000 this year to members’ local charities and Life Happens. Recipients included the Alexander Leigh Center for Autism, Crystal Lake, IL, sponsored by Bill Bovinette, Life Guys, Inc., Fountain Hills, AZ, recipient of the Col. J. William Felton III Grant, named after the NAILBA Charitable Foundation’s founder.  (Pictured are Bill and Susan Bovinette, presenting the Felton Grant check to Kelly Weaver.)

Also receiving grants were: Caruso Family Charities, Lakewood, CO; Promises 2 Kids, San Diego, CA; CAPTAIN Youth and Family Services, Clifton Park, NY; Children’s Cancer Association, Portland, OR; Downtown Ministries, Athens, GA; Rainbows For Kids, St. Louis, MO; Arkansas Children’s Hospital, Little Rock, AR; Amos House, Providence, RI; Child Help Children’s Advocacy Center of East Tennessee, Knoxville, TN; Delta Gamma Center for Children with Visual Impairments, St. Louis, MO; Hooves to Heal, Marengo, IL; Simon’s Fund, Lafayette Hill, PA; Reach-A-Child, Madison, WI; The Arc of San Diego, San Diego, CA;  Songs of Love Foundation, Forest Hills, NY; Children’s Cancer Network, Chandler, AZ; and Life Happens.

Over 250 carriers, vendors, BGAs and marketing organizations contributed to the NAILBA Charitable Foundation for the 2016 grant cycle, and of special note were particularly generous contributions from: Legal & General America, Prudential, Genworth, LifeMark Partners, The Marketing Alliance, AimcoR Group, Protective Life, BRAMCO, Foresters, National Brokerage Agency (NBA), and Mutual of Omaha.

For more information on the NAILBA Charitable Foundation, or to donate, visit: www.nailba.org/foundation/home.

My experience with charitable work in our industry is by no means limited to the NAILBA Charitable Foundation however.  I applaud Brokers’ Service Marketing Group, Providence, RI, featured in each November’s issue, for organizing their premier producer engagement event around their annual charity golf tournament.  In the 15 years that BSMG has held the event they have raised nearly $1 million for two deserving charities in their area and should be recognized as an organization that should be emulated by all.

Further, over the past two years I have run numerous news releases focused on carriers’ sizeable charitable endeavors, and run features on the efforts of National Life through their foundation and on Foresters and their contributions to children throughout the country.  Up for 2017 is Allianz and their incredible work in their community, as well as others throughout the year.  I encourage you to utilize these, and other stories with which you are familiar, to help sway public opinion one client or prospect at a time.

Our industry has paid out many billions in death claims in its history, and I doubt many grieving spouses or families have found those checks repellant.  Yet the mainstream media has been diligent and surprisingly successful in painting the insurance industry as heartless.  It seems to me that diatribes against our industry, and the collateral damage inflicted on those least able to cope with the tragic loss of a loved one by nurturing them to resent insurance companies as a whole and thus remain unprotected, are the acts of parties committed to an, at best, irresponsible agenda and with a truly heartless disregard for the people they claim to champion. [SPH]

I have a great appreciation for impaired risk underwriting and the carriers, BGAs and brokers who work actively at finding coverage at a fair rate for those with medical conditions (or, more personally culpable, eating habits and other albatrosses…albatrii?) that place them outside the marble palaces of the super preferred, the gated communities of the  preferred, or even the four bedroom, three and a half bath comfort of the stalwart standards.  Now I’m not quite a grass mat in a yurt, but I digress.

The brokerage business has its roots in the substandard market, finding coverage for those clients spurned by more conservative career carriers.  As more aggressive pricing followed the increased awareness of actual risk, competition for those qualifying for standard or better classifications increased and what today we view as being of best service to those in need—finding the best product/price balance for customers, healthy or less so—unfairly branded many with a scarlet letter. Fortunately that perception has morphed by and large into a realistic view of greater choice equals being of greater service.

Service to those in need, healthy or less, is the moral payday for insurance professionals.  Career or independent, many carrier contracts or just a few.  I had a conversation with a young (and new) producer a number of years ago, who happened to be employed by a captive/career company but found himself attending a brokerage meeting with his broker father.  The lightbulb of greater choice was beginning to glow, and he questioned whether he was actually doing a disservice to his customers by hard-selling his very limited life product selection.  My counsel to him was to continue his career for the present, pointing out that he was gaining valuable knowledge that would make him a better advisor as his path, with the ultimate goal of independence entrenched, progressed.  I suggested that he recognize that even though he was perhaps not as able as his father to find the best products for his customers, that as his prospects’ initial, or perhaps only, contact with a life insurance salesperson, he was still providing much needed coverage for families who quite likely would have none without him.

LIMRAs Facts About Life 2016, prepared for this year’s Life Insurance Awareness Month in cooperation with Life Happens, bear out this disheartening truth.  Just one of many helpful items in the fact sheet: In 2016, more households who believe they need more life insurance say the reason they haven’t purchased is because they haven’t been approached by a financial professional (25 percent in 2010 versus 35 percent in 2016).

Its perhaps not statistically defensible, but I would add that another percentage of families remain un- or under-protected due to attitudes simmered by a liberal media and their fawned-upon icons who portray “Insurance Companies” as monolithic, heartless institutions serving as hedonistic financial playgrounds for the ultra rich.  Our industry’s consumer advertising unfortunately too rarely does much to mitigate this belief, often talking about ways to amass income for a comfortable retirement in conditions outside the experience of many potential consumers.

Many of you advisors/brokers/producers/agents make a very nice living providing retirement, estate and legacy counsel to those who’ve done well for themselves in their business careers.  More power to you!  Don’t think for a moment that I think one shouldn’t reap the rewards of hard work, prudent investment and or innovative thought.  The “one percent” and many thousands of conservatives are employing the vast majority of the people bitching about them, providing the income that pays not only for the poster board and markers they brandish at their marches, but their parents’ Subarus, Volvos and Escalades that they drove to the rallies while texting on their iPhones.

I have a dear friend who has absolutely lost his mind during this current election cycle, one more vitriolically polarizing than any I can remember.  I, and my blood pressure, are fortunate not to be on Facebook, but my wife is, and friended him several years before the recent primaries.  I occasionally get a masochistic twinge and listen to her renditions of several of his 20+ daily posts demonizing a particular entrepreneur and all who feel compelled to vote for him.  Steadfast in his manic denial of any legitimate mitigating factor and deafeningly silent on any of the treacheries of his second choice, he “works” for an entrepreneur who apparently allows him a great deal of time each day for Facebook.  Either that or he feels the time he’s stealing from his employer makes him somehow closer akin to his Jesse James as Robin of Locksley candidate.

By the time many of you read this the election will be decided and we will find a way to adapt to either a semblance of responsible economic policy or another four years of industry adverse conditions (to say nothing of a Supreme Court even more determined to turn the Constitution into a left-wing comic book).

My elusive point is this:  No widow receiving a death benefit check has a negative feeling about life insurance beyond wishing there had been more. Those who’ve been fortunate enough to create a decent retirement and estate already appreciate our industry for what you can provide, but less so those for whom a $100,000 or $250,000 death benefit could make a huge difference in the future of their families.

Your efforts every day provide immeasurable solace for families in crisis, and for that you should be applauded, rather than sneered at by proxy.  But my feeling is that the most effective way to lessen the traction of our detractors is by reaching out to serve those lower commission clients—filling the void of those without insurance advisor contact—and thus changing perceptions one future grieving but grateful family at a time.[SPH]

It is not a coincidence that the Agent Best Practices issue contains our annual DI Forum.  I have long held that any insurance advisor—life or annuity producer, health agent, worksite benefits specialist, financial advisor, registered rep, estate planner, and even property and casualty agent—should have the income protection conversation with each and every employed client.  For the vast majority of consumers an extended disability would be very disruptive if not catastrophic to virtually every aspect of their well crafted lives.

Without the ability to fund plans and pay bills, estate and legacy plans are eroded.  Premiums on life, health, home and auto coverages go unpaid and policies lapse.  Private school tuitions and college funding plans become unrealistic.  Mortgages, utilities, food and clothing needs become suddenly problematic.  Even with medical insurance, the attendant costs of the illness or injury are myriad and drive families deeply in debt.  You lose commissions on current and future sales, renewal income and naturally referrals.  And if, as a conscientious advisor, you grow to care deeply about the wellbeing of your clients you lose sleep.

LIMRA, along with Life Happens, conducts an annual Insurance Barometer Study, and produces a very useful fact sheet each year for Disability Insurance Awareness Month.  The 2016 version repeats the statistic that 7 in 10 working Americans understand the importance of disability insurance, yet only one third have coverage.  A clue lies in the middle stairstep of this research:  72 percent of respondents believe most people need disability insurance; 33 percent say they own disability insurance; but only 55 percent say “I need disability insurance.”

Theories abound surrounding the disconnect with the public:  The idea that “it won’t happen to me”;  human nature and procrastination; the idea that DI isn’t affordable for many; the old “but what if I never use it?”; and many others.  The very disconcerting fact that comes from many conversations with DI devotees, and from several of Life Happens’ Real Life Stories,  is that many consumers relate that simply no one had approached them about buying an income protection product or had a meaningful conversation with them about the very real risk of a disability and the potentially devastating effects.

This, in my opinion, is both our industry’s great shame and our most easily correctable ethical error.

Also no coincidence is that October is the month chosen for the annual conference of the International DI Society (IDIS)—this year’s meeting (the group’s 12th) to be held October 15-18 in beautiful Charleston, SC.  The group’s mission statement: The International DI Society is an organization dedicated to growing the disability insurance industry through education, awareness, promotion of high ethical conduct of the membership and increasing the knowledge base of the agent, producer, company and carriers.  Member benefits include: the annual conference, industry information, a company directory, DI Coach Referral Action Program,  education and disability insurance designations, IDIS study groups, a LinkedIn discussion group, producer videos, affiliate associations and societies, available publications for purchase, and a speakers bureau.

I encourage each of you to join the International DI Society and attend the annual conference—either to further hone your income protection sales approach or to perhaps solidify a commitment to better pursuing this crucial protection for all your clients and prospects.  I ask you to look at your family, your home(s), your car(s), your clothes, the summer vacation photos on your phone, and the plate of food in front of you—have you personally taken the steps to protect these by insuring your own income?  And most important—your clients bought all these things for you.  Don’t you owe them at least a diligent effort on your part to protect their incomes so that they can continue to enjoy these same things themselves?

To find out more about the International DI Society, visit www.internationaldisociety.com or email [email protected].[SPH] 

September is, at least for the September 2016 version of this column, quite simply the most important month of the year.  Arguments can, and perhaps will, be made for any of the other months—I may be unwittingly exposing my company and person to mass protests on the streets of suburban Kansas City by both dedicated April Fools (despite a well-documented case for honorary lifetime membership) and armies of sandal-candle, tree-hugging, wood-hippie Arbor Day devotees.  As a dedicated print publisher and, by default, unrepentant tree killer, I assure you that it won’t be the first time I’ve had to pay to have ridiculous amounts of maliciously flung sap painstakingly removed from my gas-guzzling SUV.  (Although I personally believe Julius Sterling Morton was just another opportunistic demagogue, as a service to my ideological adversaries I offer you the Arbor Day Foundation’s website—www.arborday.org.  Apparently the national recognition of this momentous holiday—thanks to Richard Nixon—is celebrated annually on the last Friday in April…they even have a countdown clock on the website…no kidding.)

Coinciding with the relieved sighs of countless millions of parents celebrating their own interpretation of no child left behind, September marks, for many, the ability to return to work, responsibility and service at least less interrupted.  In our universe it also beckons two of the most significant events in our industry—Life Insurance Awareness Month (LIAM) and the National Association of Insurance and Financial Advisors’ (NAIFA) Annual Conference.

To make sure Americans are reminded of the need to include life insurance in their financial plans, the nonprofit organization Life Happens (formerly known as the Life Foundation) coordinates Life Insurance Awareness Month. Life Happens is joined in this educational initiative by more than 100 of the nation’s leading insurance companies and industry groups.

I implore you to join Life Happens (www.lifehappens.org), both to support this worthy organization and to avail yourself of a wealth of agent resources to use in your marketing campaigns, in client education and in spreading the word at a grass roots level about the benefits of life insurance.  Despite the public perception of the endlessly deep pockets of insurance companies, no entity has the funds to truly combat widespread liberal media and office seekers’ portrayals of our industry as opportunists merely feeding heartless financial monoliths, and Life Happens is no exception.  But they do offer you a vast array of tools to influence one or more minds at a time in your communities.

Perhaps the best known of these resources is Life Happens’ series of Real Life Stories, available as flyers or even embeddable videos, that reinforce the need for life insurance in powerful, emotional ways.

Perhaps less known but powerfully demonstrative of our industry’s compassion for others, Life Happens sponsors the annual Life Lessons Scholarship Program for college students and college-bound high school seniors. Qualified entrants who submit essays or videos about how the death of a parent impacted their lives are eligible for scholarship money. Over a million dollars in college scholarships have been awarded over the years. The total of scholarships for the 2016 Program is $260,000, to be awarded in various amounts to 33 young people struggling to afford a college education due to the loss of a parent or guardian.  Individual contributions are accepted from those wishing to support this important initiative. Your financial support can make a world of difference, and donations to the Life Lessons Fund are tax-deductible.  Donations can be made at https://www.lifehappens.org/life-lessons-scholarship-program/donate-to-life-lessons.

Over three decades serving the insurance industry has left me still an ardent advocate for the NAIFA organization (formerly NALU).  Any internal debate about the self-serving benefits of NAIFA you may recognize need be addressed elsewhere, despite the preponderance of member benefits represented on the NAIFA website (www.naifa.org).  From industry advocacy to a wealth of practice resources and professional development programs, NAIFA certainly has a great deal to offer both the established insurance professional and the early career advisor.  And therein the artfully-crafted segue.

My experience in the industry was indelibly etched with memories of early NAHU conventions.  Not as much by the well-presented programs or the boisterous “networking” during breaks and in the evenings, as by countless times that I saw respected veterans of this industry take time for either a few minutes of simple encouragement or for lengthy, in-depth mentoring of young agents trying to make their way in the business.  In my capacity as neophyte servant to the industry, I was often the beneficiary of both as well.  Too many great guys from the Kansas delegation to even try to mention.

While the pursuit of financial wellbeing is certainly still a consideration today, I assume that most, if not all, of us must recognize that at the ethical heart of our industry is the mandate to be of service to our fellow man in our unique way—protecting families and legacy wishes through the sales of insurance products.  I contend that those who today enjoy a comfortable life, earned as a result of dutiful service to consumers, have still a further moral mandate to pass their knowledge, compassion, ethics and sense of purpose to those less experienced men and women who are trying to forge a career in our industry—by not only steering them to NAIFA but by welcoming them yourselves when they walk through the door.  Give back to the industry that has treated you well—at your local level, and by providing yourself as a resource at the 2016 NAIFA Annual Conference.  Plus it’s in Vegas.  Register at http://www.naifa.org/events/performance-purpose-2016-annual-conference. [SPH]

Undying thanks go out to Claude Thau, Thau, Inc./Target Insurance Services, and the great folks at Milliman, Dawn Helwig, Allen Schmitz, Nicole Gaspar and Taylor Schmidt, for their tireless work in producing both last month’s 2016 Long Term Care Insurance Survey and this month’s 2016 Analysis Of Worksite LTC Insurance.  Broker World has been truly blessed to be able to provide the industry’s most comprehensive studies of LTCI products and trends for 18 years now, and it is only through the efforts of these fine champions of our industry that we are able to be of service to you, our readers, in this manner.

It is perhaps an unwitting philosophical disservice that the LTCI study appear in this issue, with a focus on brokerage niche marketing.  Included are four fine articles about various niche products and niche marketing approaches, but their proximity to a long term care insurance study now tilts this column into further discourse on a seemingly impossible dream.  Panzamonium.

Whether I wear the mantle of the witty squire or that of his delusional knight is problematic and presently beyond my powers of introspection.

BusinessDictionary.com defines niche marketing as “concentrating all marketing efforts on a small but specific and well defined segment of the population. Niches do not ‘exist’ but are ‘created’ by identifying needs, wants, and requirements that are being addressed poorly or not at all by other firms, and developing and delivering goods or services to satisfy them. As a strategy, niche marketing is aimed at being a big fish in a small pond instead of being a small fish in a large pond.”

Therein lies the disheartening paradox. Our industry is behaving as though LTCI, and further, DI, are niche products, and dedicated LTCI and DI product champions are niche marketers.  It is my perception, and that of many of my industry friends, that brokers who diligently pursue providing these products to their clients are comparatively few in number—one might think this would label them big fish?  Yet their target market is vast—an incredibly large pond.  Virtually everyone in the country who: Is employed or has an income and is not barely scraping by to provide basic necessities (food, shelter, clothing); Is not so vastly wealthy that they cannot possibly exhaust their resources in their lifetime; Has not gained irrefutable knowledge of their future sudden demise without need of services; Doesn’t give a hoot if they become a pitied and resented burden on their loved ones; Has a medical condition that definitely eliminates them from obtaining any type of LTCI or DI policy; Has absolutely no legacy ideals or desire to benefit their heirs.  I’m sure there are a few others.  But it’s these people who fit the description of a niche market—a small but specific and well defined segment of the population—not the eligible customers for DI and LTCI protection.

So how does the brokerage industry rate on “…the needs, wants and requirements that are being addressed poorly or not at all by other firms?”  On “…developing and delivering goods or services to satisfy them?”

Facts from LIMRA for Disability Insurance Awareness Month:

• Over half of working Americans worry about the effects of a disability. Among younger workers the percentages are higher.

• The average worker faces a 3 in 10 chance of suffering a job loss lasting 90 days or more due to a disability.

• More than half of all personal bankruptcies and mortgage foreclosures are a consequence of disability.

• Seven in ten working Americans understand the importance of disability insurance, yet only one-third have coverage.

Facts from LongTermCare.gov:

• 70 percent of people turning age 65 can expect to use some form of long-term care during their lives.

• Women need care longer (3.7 years) than men (2.2 years).

• One-third of today’s 65 year-olds may never need long-term care support, but 20 percent will need it for longer than five years.

According to the American Association for Long-Term Care Insurance, 2014 LTCi Sourcebook, only 8.1 million Americans were protected with long term care insurance.

Those morsels indicate some pretty darn panoramic niches.

With only a figurative handful of carriers serving the LTCI and/or DI markets, and relatively few fish earnestly serving the need, the industry as a whole is shirking its responsibility to deliver DI and LTCI risk abatement solutions to American consumers as a whole.  But perhaps more disheartening (and shaming) are the multitudes of eligible customers in brokers’ client lists who have not been legitimately informed of the risks they face, the benefits that are available, the true need for coverage and the full range consequences they face by refusing to pursue coverage.  It should be the ethical if not moral duty of all financial professionals to diligently pursue DI and LTCI solutions for their clients—those same clients whose premiums provided countless hot meals, season tickets, fancy cars, nice homes, memorable vacations, designer clothes and nice schools for the families of insurance professionals they trusted to provide the coverage needed to protect their own families.

Combo policies, hybrids and linked benefits are undeniably helping, but the numbers of the underserved are still staggering.  This problem is no windmill. [SPH]

I must begin by expressing my extreme gratitude to friend Claude Thau, Target Insurance Services and Thau, Inc., and the wonderful folks at Milliman, Inc., Dawn Helwig, Allen Schmitz and especially Taylor Schmidt (who caught enough of my editing errors that I’m convinced she could pick fly “sign” out of pepper!), for their fantastic work collecting, organizing and analyzing the information for the 2016 Long Term Care Insurance Survey featured in this issue.  This marks the 18th year that Broker World has been thus blessed to provide our readers with the industry’s most comprehensive LTCI product comparison along with the valuable insight of these peerless industry experts.  Further, in the August issue Broker World will again provide an analysis of work-site sales, and in the September issue we intend to publish a brief survey regarding combo life and LTCI policies which offer extension of benefits features (LTCI benefits can continue after the death benefit is exhausted).  Great organizations are the result of great work by great people, and Claude, Dawn, Allen and Taylor certainly bear that out.  Thank you![SPH]

One of the greatest blessings we owe to this industry are the wonderful friends we make on our journey, but inevitably it brings us sorrow as well.  It is my sad duty to here recognize the passing of good friend Martin “Marty” Rochkind, Insurance Marketing Center, Rockville, MD.   

 Marty began his career more than 40 years ago as an insurance agent for Metropolitan Life and later as an independent broker marketing employee benefits to small and medium-sized businesses. From 1967 to 1986, he qualified for the Million Dollar Round Table and was a Charter Member of the Court of the Table.  As a successful broker, Marty recognized a need in the marketplace to provide resources and personalized service to brokers and agents.  As a result, he formed Insurance Marketing Center (IMC) in 1986, and grew the business into the largest independently owned employee benefits brokerage in the DC area. 

Marty was widely known in the industry for his marketing expertise and dedication to quality service.  He was a gifted marketer of innovative concepts and niche products such as consumer driven plans, retiree health plans, international medical plans and limited medical plans.  His career included serving as president of Leaders Club of Washington and of the National Association of Insurance Marketers (NAIM), a major national brokerage general agent marketing group. 

Marty developed, produced, and directed numerous IMC health brokerage fairs, single-day marketing and sales extravaganzas attended by hundreds of brokers annually. He was the first moderator of the Group Insurance Program sponsored by the Life Underwriter Training Council (LUTC).  He wrote a workshop called “101 Group Insurance” for agents, brokers, and staff who need to understand health insurance and how it works.

I met Marty through my work with NAIM and found him to be a passionate advocate for the industry, for brokers (and for his own point of view!).  He had a passion also for baseball, and for collectibles—in particular framed photos of ballparks, old and new.  I couldn’t believe how much he glowed and crowed when I sent him a photo of Kansas City’s stadium, one he was missing.  I recently visited KC’s Negro Leagues Museum and I can’t help but think how much Marty would have loved it.

Marty Rochkind held his friends dear and made sure they always felt it—and I’m damn lucky to have been one of them. [SPH]

June’s column inexorably draws from me a miasma of righteous (and coincidentally right-leaning) indignation, paranoia (overwhelmingly justified?), impotent anger and a sense of impending doom.  Coupled with my seemingly unquenchable cynicism toward our government’s ability to affect efficient, well supervised, fair and affordable solutions to any problem, particularly those emotionally charged and/or particularly beneficial to either political party’s constituency, I’m extremely challenged to provide even a “fair and balanced” dissertation on the glaring flaws and unforgivable encroachments on individual and states’ rights of the “Affordable” Care Act (ACA).  It is apparent to me that the advisors of our elected officials have either been snickering at us for decades behind their hands or skipped school to smoke dope on the days that their English teachers discussed oxymorons.

In an effort to taint my diatribe with an inconvenient fact, the efforts of elected officials on both the state and federal level have, through their actions, negatively affected my company’s profitability—there are simply fewer health insurers, and coincidentally poignantly fewer who choose—or for whom it makes sense to choose—to advertise in Broker World.  Diagnose that condition as the result of restrictions to profitability that cause either carriers’ exit from the market altogether, or receding from disadvantageous areas thus limiting their territory and our pricing’s appeal.  I am certainly not an impartial observer.

And neither are you.  The effect on the market and on producers and their ability to serve consumers has obviously been much more significant.  The ripple effect on businesses trying to juggle benefits dollars is unavoidable and can affect all facets of insurance product distribution—from boardrooms, accountants’ offices and registered rep lunches to cafeterias, golf courses and family kitchen tables.  There is, for almost all of us unelected, only so much money.

Although I can’t even fathom how profitable it would have been to be a vendor selected to publish the actual volume containing the Act—a volume so thick no responsible parent would even consider using it as a booster seat—I would rather beat myself in the head with a meat tenderizer than have to edit and proofread it.  I vacillate between pity, deep admiration and an urge to institutionalize anyone who has actually read and studied it.  I’m firmly convinced none of our elected officials fall into this category.

Fortunately some tortured souls have spent (I imagine) immense amounts of time studying the ACA and I stumbled across several well thought out online articles while searching for my muse.  One in particular was from The Heritage Foundation (http://www.heritage.org/research/reports/2016/04/year-six-of-the-affordable-care-act-obamacares-mounting-problems).  In the article by Robert E. Moffit, Ph.D., senior fellow, Center for Health Policy Studies, the author outlines a great number of the problems with the ACA that have become apparent in year six.  I found it an engaging read, though too in depth for me to do even passing justice to it here.  But within the article Moffit relays the “Top 10 Reasons Why the ACA’s Future is Uncertain,” and I’ll list them here.  The author expands on each of them extensively within his thought-provoking piece.

Moffit’s Top Ten:

Reason #1: Despite the President’s repeated promises, rising insurance costs continue to burden businesses and families.

Reason #2: The ACA generates big and surprising out-of-pocket costs.

Reason #3: The ACA has reduced insurance competition.

Reason #4: The ACA has a negative impact on job growth.

Reason #5: The overall health care cost curve is “bending” upward.

Reason #6: The ACA is imposing major tax increases on America’s middle class.

Reason #7: Medicare payment cuts will threaten seniors’ future access to care.

Reason #8: The ACA threatens increased deficits and debt.

Reason #9: The ACA forces Americans, in direct violation of their rights of conscience, to fund abortion through their tax dollars.

Reason #10: The ACA imposes arbitrary rules and costly mandates.

Each of these findings is in direct conflict with the assertions made to promote and support this panacea shoved down American’s throats by—to put it mildly—an act of legislative ignorance and subterfuge.  Adding insult to injury, in 2013 the Obama Administration provided special taxpayer subsidies for Members of Congress and staff to offset their higher insurance costs in the ACA health insurance exchange.

I encourage you to read the lead editorial in this issue for a greatly insightful review of the flaws of the ACA from an industry perspective, written by Art Jetter, president of Art Jetter & Associates, Omaha, NE, a much brighter bulb than I and, I suspect, one of the tortured souls alluded to previously.  God bless him! [SPH]

Just what we needed.  The Department of Labor has released its final fiduciary rule—a 1023 page document seen by many (or at least me) as a great boon to significant segments of the U. S. population: attorneys, the IRS and insomniacs.  One might further the analysis by suggesting that the rule, like social programs without judicious oversight and the voting bloc of the left, will create an inevitable increase in at least the third category of constituents—that bounty being you, the now-sleepless-in-Scranton insurance agent.

To put it mildly I haven’t the brain power of even the least accomplished actuary (although three people in my acquaintance suggest I may have a better sense of humor), but I am “gifted” with a chronic, seemingly irreversible, morbid cynicism regarding the liberalization of the American judicial system.  Most poignantly involving rulings that emasculate the concept of personal responsibility and transfer huge sums of money, on a contingency basis, from the pockets of defendants who “can afford it” to the Brooks Brothers pockets of ambulance chasers and, often tragically fleetingly, to the leatherette wallets of individuals (or their dependents) who were, in a sane society, quite likely destined to become uncompensated casualties of Darwinism.  It doesn’t take a rocket surgeon to figure out that McDonald’s coffee is hot or that one shouldn’t touch a metal extension pole to an overhead line regardless of how many languages are represented on the warning label.

When these characters get their hands on “reasonable compensation”, “prohibited transaction”, “sole interest of the client”, and “best interest of the client”, I can’t help but envision a teeming hoard of “best plaintiffs’ law firms” descending like apocalyptic locusts on ignorantly sympathetic courts with proof in hand that an insurance company and bait shop in Idaho offered an annuity that would have garnered the consumer the windfall of another fifteen dollars a month in retirement income.  The words “punitive damages” do not fill me with greed-infused glee.  With the issuing carrier, perhaps reinsurer, the marketing group, the BGA or IMO, the writing agent, the consultants involved in product design, the printing companies who supplied the applications, the company who produced the signing pen and the Starbucks where the contract was signed all named as defendants, the mind quakes at the costs of doing business in, around or even innocently catering to the insurance industry.  Forget the premiums for E&O coverage (if it is even still available)…think what your fair trade caramel latte will cost!

But perhaps I digress…

Clearly the Department of Labor has either willfully ignored or sadly overlooked the potential harm that this rule could bring to both the insurance industry and the consumers they serve.  We are an industry already suffering from a dearth of new talent, artificially suppressed interest rates and a mainstream media seemingly diabolically fixated on corroding the public’s faith in institutions—designed and passionately driven to provide security in retirement for clients and comfort to families in time of tragedy—by gluttonously seizing on a comparatively few miscreants (or erroneously analyzing perfectly sound transactions) and lashing the uninformed into a frenzy of ”righteous” indignation and/or ignorant outrage.

Should the DOL final fiduciary rule stand as is, it’s difficult if not impossible to see an overall benefit to consumers for myriad reasons, many of which are beyond both my grasp and the space here allowed.  But the limitations placed on producers, the disclosure requirements, the perhaps unintended confusion and suspicion that could arise in prospects during the sales process, exemptions granted ERISA plans but not IRAs, the different treatment of fixed annuities versus fixed indexed annuities, and a host of other concerns will dramatically change the landscape if not amended.  An exodus of producers—reasoned, economically necessary or mandated—would create even less ability for consumers to obtain the sound advice many desperately need.

I urge you to get involved with your industry organizations and work on initiatives to modify the DOL rule to one even remotely reasonable for our industry and the consumers you serve.  Otherwise there may be more than a few of us asking: “Do you want whipped cream and drizzle on that?” [SPH]

It is my distinct pleasure to here recognize dear friend Ross Hopkin, The Brokerage Inc., Lewisville, TX, as the 2016 recipient of the Billy Vogel Award from The Marketing Alliance.  Announced recently at the marketing group’s spring meeting in San Antonio, TX, Hopkin was recognized as clearly meeting the award’s criteria of business acumen, sense of innovation, and above all integrity.  The award is named after and honors the late William E. “Billy” Vogel, the W.S. Vogel Agency, Livingston, NJ.

Shortly after receiving a degree in finance from the University of Houston in 1964, Hopkin began his insurance career as a group rep with General American.  After stints with Ranger and Blue Cross Blue Shield, he recognized the need to be able to offer the products of multiple companies and opened his own brokerage shop in 1976, with a typewriter, one group health insurance contract, and his wonderful wife Cheryl.

The agency grew to be a major force in the group and individual major medical market and added a life department in the late 1980’s and a long term care department in the 1990’s.  In 2001 he recast the agency with a focus on Medicare related products that would help the agency evolve into a national presence, capitalizing on opportunities presented in changing demographics and changing legislation.  Today, The Brokerage Inc. is a national marketing organization with 30 employees, many of them long term.

Hopkin has served on many insurance carrier and agency advisory boards, was one of the initial investors in The Marketing Alliance, and helped to build The Brokers Health Insurance Network and SubCenters.

I met Ross over 25 years ago as I was helping promote the fledgling Brokers Health Insurance Network. I find him to be a great friend, a savvy businessman and a great ambassador for our industry.  Congratulations Ross! [SPH]

April is the month to work up action plans for Disability Insurance Awareness Month, a campaign initiated annually by the Life Happens organization.  I encourage you to visit www.lifehappens.org as well as the Council for Disability Awareness,www.disabilitycanhappen.org, and the International DI Society, www.internationaldisociety.com, for a wealth of information and resources to help coordinate your efforts to serve your clients and prospects by helping them to protect the most important asset they possess—their income!  See page 71 in this issue for a further breakdown of some of the tools available from these great organizations enthusiastically serving our industry. [SPH]