Stephen Howard

The first life insurance policy sold as such is widely believed to be one on the life of one William Gybbons for a one year term, a face amount of 400 pounds, and a premium of 32 pounds. Unfortunately (my assumption, not necessarily reflective of the emotions of his widow, heirs or associates, but strong presumptive evidence suggests it to be the feeling of the insurers) Mr. Gybbons expired shortly before the policy did, prompting not only the first death claim, but also the first instance of life insurance litigation. It seems the gentlemen jointly insuring his life attempted to assert that the 12 month term was intended to be measured in lunar months rather than calendar months—an argument not upheld by the court presiding.

I’ll make the giant leap that the case of Mr. Gybbons had at least some butterfly effect on the focus of this month’s issue—the impaired risk. I would fancifully suggest that had the insurers been able to take a closer look at a variety of factors surrounding Mr. Gybbons’ life—his health, occupation, lifestyle, family history, etc.—they might have been better able to assess his mortality and decide either to charge a higher premium, exclude certain circumstances or decline to accept the risk. Perhaps not—maybe he was perfectly healthy and just stepped in front of a runaway carriage.

It’s not nearly so wide a leap to trace the origins of brokerage to the impaired risk—substandard business. Years ago most career companies wanted mainly “healthy” business, and those with health impairments were declined. A few intrepid wholesalers and carriers made their living finding and providing coverage—typically more expensive—for these declined individuals and their families. Agents with declined clients went to substandard agencies that would in turn shop the cases through their lineup of carriers to find the most favorable rating for the proposed insured.

Today  brokerage encompasses much more than finding coverage for those with health impairments, but the underlying premise remains—finding the best possible coverage for the client, his family, his business and his employees. Most BGAs count their prowess at aiding the impaired risk as a strong contributing factor to the relationships they are able to form with independent agents and financial planners, leading them to establish new levels of service to consumers via case management, internal underwriting and assessment, and business continuation, estate and legacy planning expertise.

Central to all is that service to the consumer is paramount. Helping the person with a health impairment find coverage that will benefit his family at a price he can afford where others either could not, or would not, truly sets the independent agent and the BGA apart. [SPH]

A significant fact central to the success of the agent and the potential benefit to those he would come in contact with is that he simply has the motivation to set out each day to help someone—breadwinner, family, business owner or group of employees. Pursuant to that, Broker World friend and editorial contributor Ken Smith, Assurity Life, has published a book entitled Sales Lessons from the Masters in which he explores the sales techniques, principles and philosophies of four insurance industry icons: Frank Bettger, W. Clement Stone, Ben Feldman and Joe Gandolfo. Smith devotes a chapter to each of these sales giants and then outlines the common denominators that made each of these men successful. In his forward to the book, John F. Nichols, president of Disability Resource Group, states that “The most important person today is you…because of your application of these sales principles, you will be positively serving others with your products and services.” He goes on to add, “Let these universal principles positively impact you and those who come into your life.” To obtain the book or communicate with Ken Smith, email him at Ken@kensmithsales.com. [SPH]

Sad news for many in the BGA and carrier community, as Linda Zuckerman, wife of Gordon Zuckerman, Murray and Zuckerman, Inc., Schenectady, NY, passed away on September 23. Although not active in the industry, Linda frequently shared her great smile with me and many others at various industry events, most frequently for me at the NAILBA conferences. In my experience she was a warm, caring person who never failed to greet me with enthusiasm and a friendly hug. She will be missed by many. [SPH]

Also lost was Marilyn Lampert, wife of Arnold and mother of Tony, Professional Planners Marketing Group, Palm Beach, FL. Although they sold the agency a few years ago, many still remember Arnold, Marilyn and Tony, fixtures at NAILBA meetings and qualifying guests at more company trips than one could count. Our condolences go out to the Lampert family and all others who held Marilyn dear. [SPH]

Our industry does a great deal of good for the people of this country. In the midst of an abundance of negative leaning press and an undercurrent of “us against them” regarding insurance companies, I believe the good you do is being undermined. The fact is that the diligence of the insurance agent and the products offered by insurers are all that stand between millions of American families and financial devastation and the crumbling of their dreams. You, your BGA partners, and the carriers you represent do protect and care for the widows and orphans. It’s that simple.

Beyond that too often underpublicized good, however, our industry is rife with examples of organizations that reach out to further the opportunities of those less fortunate. Two I would like to focus on are the National Association of Independent Life Brokerage Agencies (NAILBA) and Life Happens (formerly the LIFE Foundation).

I have the honor and privilege of serving on the NAILBA Charitable Foundation board and I’ve seen firsthand the generosity of literally hundreds of BGAs and carrier representatives at the annual NAILBA conference. Further, the list of regular contributors to the foundation takes fully two pages in their program (and this magazine) to recognize. This year through the generosity of these donors the NAILBA Charitable Foundation was able to award $265,000 in grants to deserving organizations in NAILBA member communities that serve to enhance the quality of life for those less fortunate, with an emphasis on children. Included in that total is $30,000 to the Life Happens organization for their Life Lessons Scholarship Program.

Following are the other grant award recipients for 2014:

Caruso Family Charities: $27,500, recipient of the Col. J. William Felton III Grant, Lakeland, CO (sponsored by NAILBA member agency Colorado Brokerage); Lone Survivor Foundation: $25,000, Houston, TX (sponsored by NAILBA member agency Four Seasons Financial Group); Wounded Warriors Family Support: $20,000, Omaha, NE (sponsored by NAILBA member agency Art Jetter & Co.); GlassRoots, Inc.: $15,000, Newark, NJ (sponsored by NAILBA corporate supporter Prudential); The Quest for Grace Foundation: $15,000, Rexford, NY (sponsored by NAILBA member agency National Long Term Care Brokers); We Care I.N.C.: $15,000, South Haven, MI (sponsored by NAILBA member agency LTCI Partners); Fresno Survivors of Suicide Loss: $12,380, Fresno, CA (sponsored by NAILBA member agency CPS Impact); Lighthouse Family Retreat, Inc.: $12,000, Norcross, GA (sponsored by NAILBA member agency The Brokerage Resource); Angel On My Shoulder: $10,000, St. Germain, WI (sponsored by NAILBA member agency CPS Horizon); Delta Gamma Center for Children with Visual Impairments: $10,000, Richmond Heights, Mo (sponsored by NAILBA member agency The Marketing Alliance); Down Syndrome Connection of the Bay Area: $10,000, Danville, CA (sponsored by NAILBA member agency H.D. Mooers & Co.); El Viento Foundation: $10,000, Huntington Beach, CA (sponsored by NAILBA member agency CPS Insurance Services); NourishNC: $10,000, Wilmington, NC (sponsored by NAILBA member agency Financial Security Associates); Songs of Love Foundation: $10,000, Forest Hills, NY (sponsored by NAILBA member agency CPS Horizon); Casa Valentina, Inc.: $7,500, Miami, FL (sponsored by NAILBA member agency Landers–Stein & Associates); Ivy Hill Therapeutic Equestrian Center: $7,500, Perkasie, PA (sponsored by William J. Shelow, NAILBA member agency LifeMark Partners); More Than Sport: $5,000, Kailua Kona, HI (sponsored by NAILBA member agency Trumark); Reach-a-Child, Inc.: $5,000, Middleton, WI (sponsored by NAILBA member agency MVP Financial Services); Give Them Wings: $5,000, Hood River, OR (sponsored by NAILBA member agency CPS Impact); One Bright Star: $3,500, Mankato, MN (sponsored by NAILBA member agency Weilage Advisory Group).

The NAILBA Charitable Foundation is a public charity that receives gifts mainly, but not exclusively, from the membership of NAILBA and its corporate supporters. The mission of the NAILBA Charitable Foundation is to encourage volunteerism among the NAILBA membership and provide grant funds to worthy charitable organizations with limited operating budgets in local communities served by member agencies, with a special emphasis on those that enhance the quality of life for children. To make a contribution or receive more information about the NAILBA Charitable Foundation, please contact Kathy Allison, NAILBA’s director of membership and the foundation at kallison@nailba.org or 703-383-3072, or visit www.nailbacharitablefoundation.org.

In addition to all the great resources the Life Happens organization makes available to educate consumers and to help agents spread the word about the need for life insurance and disability income insurance via May’s DIAM and September’s LIAM campaigns, Life Happens also helps aspiring college students through their Life Lessons Scholarship Program. The organization recently announced the 2014 scholarship winners, awarding an unprecedented $180,000 divided among 47 deserving students to put toward their dream of a college education. This marks the greatest number of recipients and the highest level of funding Life Happens has provided through the program since its inception in 2005. Further, this is the fifth consecutive year that Life Happens has awarded more than $100,000 in Life Lessons scholarships, which was made possible by the generous financial support of the NAILBA Charitable Foundation, the MDRT Foundation, LIDMA and NAHU Foundation.

“The Life Lessons Scholarship Program is a powerful reminder of the unintended consequences that can occur when a parent dies without adequate life insurance. Those left behind are faced with difficult choices, and far too often, aspirational life plans such as college have to be put on hold in order to address more immediate financial priorities,” said Marvin H. Feldman, CLU, ChFC, president and CEO of Life Happens. “The program reminds us all of how important life insurance is to ensuring our loved ones have a financial lifeline to fall back on.”

To be considered for the Life Lessons Scholarship, students submitted an online application accompanied by either a three-minute video or 500-word written essay describing the emotional and financial adversity they faced after losing a parent who did not have adequate life insurance or no coverage at all, and how that affected their college funding plans. This year, Life Happens let the public play a role in providing two scholarship recipients from the video category with an additional scholarship. Each received an additional $4,000 as a result of people viewing, liking and sharing their videos through Life Happens’ Facebook page. The remaining scholarship winners were selected by a panel of judges consisting of members of the Life Happens board of directors, as well as executives from a number of leading insurance companies. The stories of this year’s top recipients can be viewed at www.lifehappens.org/scholarship-recipients.

Life Happens will accept submissions for the 2015 Life Lessons Scholarship Program starting February 2, 2015, through March 2, 2015. To make an individual, tax-deductible donation to help fund the Life Lessons Scholarship Program, visit www.lifehappens.org/donate. [SPH]

It’s perhaps hard to believe, but the National Association of Insurance and Financial Advisors (NAIFA) is turning 125 next year. The association is marking this incredible milestone with a yearlong celebration starting with this September’s NAIFA 2014 Career Conference and Annual Meeting in San Diego.

Seventy insurance agents gathered in Boston in 1890 to form the National Association of Life Underwriters (NALU), NAIFA’s previous incarnation, creating the foundation for what would become the nation’s largest group of insurance and financial advisors, with significant influence in Congress and all 50 statehouses. NAIFA uses this influence to provide a favorable business environment for its members and their clients, working to make sure their interests are protected and advanced. NAIFA has helped thousands of agents and advisors succeed, providing them with sales techniques, business best practices, product knowledge and other resources, as well as the opportunity to take advantage of the informal mentoring process of interacting with veteran agents who’ve enjoyed great success.

During the conference, attendees will have the opportunity to celebrate important NAIFA victories and participate in a variety of anniversary events. The association has created a 125th anniversary website which includes a digital timeline of NAIFA’s government relations victories and other major milestones.

To further their commitment to their members and the insurance industry as a whole, NAIFA has teamed with GAMA International to publish Advisor 2020, which uses extensive research to plot a blueprint of how NAIFA members can thrive in changing market conditions in the coming years. NAIFA has also worked with the College for Financial Planning to revitalize and modernize the Life Underwriters Training Council Fellow program, launching the LUTCF designation’s updated curriculum during this September’s NAIFA conference.

NAIFA’s President-Elect Juli McNeely, CFP, CLU, LUTCF, states, “The real message I hope everyone takes away from our 125th anniversary is that because of our strong history, NAIFA is perfectly positioned to help our members take on the challenges of the future.”

NAIFA state and local associations can celebrate along with NAIFA–National and share photos, video and other media on the anniversary website. To take part in the anniversary celebration, visit www.naifa125.org.

I came into the (trade press) business in 1983 and had the privilege of competing in what I would call the greatest era of the insurance trade press. Many were the friendly conversations with truly admirable competitors like Chuck Hirsch and Larry Albright of Life Insurance Selling, and Jack Bobo, Dave Carson and Joe Razza of NALU’s publication Life Association News. During his acceptance speech for NAILBA’s most prestigious award, the Douglass H. Mooers Award of Excellence, Bill Howard took special care to thank these men for helping build and strengthen the industry’s positive attitude toward the trade press, which he believed allowed him to join their ranks with Broker World.

I paid lip service to those sentiments for a number of years, but viewed LAN and NALU as the bastion of the career agent and thus just a less deserving competitor for the advertising dollar targeted to the independent agent. In my case, years and experience have, thankfully, eroded my ignorant bias and have developed in me a true appreciation of the great value of industry associations—in this particular case NALU/NAIFA.

Many are the benefits our industry as a whole receives from the efforts of NAIFA and its members, some of which are alluded to above. But the one I really want to hammer on now is the tremendous advantage I believe newer agents receive simply by interacting with those who’ve been successful for a long time in the insurance business—interactions that take place at local NAIFA meetings throughout the country. I think the career companies were right in virtually mandating NALU membership for their agents, particularly new ones. I believe new agents increase their chances of success by placing themselves in proximity to successful agents at NAIFA meetings. I further believe that the brokerage community is chiefly to blame if there is the perception that NAIFA membership is skewed toward and to the benefit of career agents. Independent agents are actively sought for NAIFA membership—including advertising in the pages of this magazine.

There is much buzz in our industry regarding the “new agent crisis”and the aging of the insurance agent field force. I happen to belong to an unrelated group that strongly suggests that those with many years of experience diligently stay involved to pass along their experience to those new to the group.

I believe the gift of your time and experience shared at your local, state and national NAIFA functions should be viewed as a grateful obligation to the honorable career that has given you so much. Mentoring new agents either casually, during interactions at local NAIFA functions, or formally, as exit strategy partners to insure the well-being of your loyal clients and their dependents, surely must be a firm step in the right direction to at least solving the new agent failure component of the graying of our industry. You can become a part of NAIFA by joining today at www.naifa.org. [SPH]

A  recognized industry sage and curmudgeon (founder and father) often reminded me that a distinction exists between “need to have” and “nice to have,” typically when solicited for largesse for either my personal material gain or desire to be heralded by way of the transitive property of benevolent credit assumption (if a gives to c through b, then b is really responsible and deserves all the credit). Once pidgin algebra and left-leaning economics are cast aside, Dad’s theorem rings true and I’m struck by the relevance to our industry and the communication between advisor and prospect. Even as immersed as I am in the belief of the true benefits insurance products bring to the purchasers, I can still waver between “need” and “nice” regarding both business and personal insurance protection decisions.

I would project that this debate between “need” and “nice” occurs daily in homes, board rooms and cafeterias throughout America when faced with insurance buying decisions, and has for decades, not just post 2008. Owners and benefits managers weighing employee retention issues; employees contemplating salary redirections; families weighing lifestyle risks. What is the extent of the ethical role of the advisor? And where is the balance point between prudence and responsibility, suggestion and insistence, resignation and persistence?

LIMRA reported in their Facts About Life 2013 that 30 percent of American families have no life insurance at all; only 44 percent have individual life insurance; and the average amount of coverage for adults has declined to $167,000, down $30,000 from the average coverage in 2004. The disability income insurance and long term care insurance pictures are even more serious. In Facts From LIMRA 2014 Disability Awareness Month, it is reported that less than one-third of working Americans have disability insurance. The American Association for Long Term Care Insurance estimated in 2009 that just over 8 million people owned long term care insurance either on an individual basis or through employer-offered protection. With the average purchase age estimated at 59, this isn’t quite as alarming as it may look on the surface, but is still dire.

The first question to mull is: How can we as an industry shift consumer attitudes regarding insurance products further toward “need to have”? Great resources are available from the Life Happens folks at www.lifehappens.org, as well as the Council for Disability Awareness, www.disabilitycanhappen.org. Many industry associations have materials available, including our friends at NAIFA, www.naifa.org, NAILBA, www.nailba.org, and IDIS, www.internationaldisociety.com. Many carriers have a wealth of materials available both publicly and for agents licensed with them. But you will have to commit to a diligent and well thought out plan of action. I welcome any comments or suggestions.

As an aside, it is my opinion that anyone enjoying the benefits of a career in insurance has a two-fold obligation to join the industry associations that serve their field—first, to yourself, to stay informed and continue to refine your ability to serve your clients; and second, a moral obligation to give back to the profession and the industry that has given to you.

Similarly, the second and more personal question is: How will you shift your attitude about products you’ve found to be more difficult to sell, or less profitable, from “nice to be able to” to “need to be able to”? [SPH]

It is my privilege to announce the (long overdue, I am reminded) promotion of Hope Howard to the position of vice president and business manager of Insurance Publications, Inc., publishers of Broker World. Hope officially joined the company in August of 2008 and started full time on April 1, 2010, a date that no doubt spurs piquant reflection on her part from time to time. Previously she served as marketing coordinator, a title sufficiently vague to allow an ever-increasing load of the less desirable tasks to accumulate on her capable shoulders. As many of the carrier and BGA friends we see on the road will attest, she is a great relationship builder and asset to the company.

Prior to joining Broker World, Hope was operations manager for the National Association of Insurance Marketers (NAIM), a marketing group for life and health insurance brokerage general agencies. [SPH]

I  believe there is a divine purpose in the work you do (and hopefully we facilitate). James 1:27 states that “Religion that God our Father accepts as pure and faultless is this: to look after orphans and widows in their distress…” That happens to be my faith, but similar instruction runs through many of the religions of the world, and many who eschew organized religious institutions still embrace this as a moral ideal. I believe there is nowhere else in business that this is accomplished better than in the life insurance industry.

In the past, the biggest “PR” obstacle to overcome seemed to be the tenaciousness of the life insurance salesman-being trapped in an elevator with one portrayed as a thing of mock horror. Today our industry seems under attack as a greedy, uncaring, elite club benefiting only a rich and powerful clientele. Sound bites from the administration and many elected officials either subtly or directly seem bent on swaying public opinion to an “us against them” perception of the insurance industry-particularly evident most recently in the PR battle surrounding the Affordable Care Act. Although I have my own bias and set of fears surrounding Obamacare and its potential mutant offspring, relevant to this particular rant is the fact that party line pontificating most often sounds something like “We are no longer going to let your insurance company…”followed by whatever litany of perceived sins seems most appropriate for the mob they are seeking to inflame. Seldom if ever is the word “health” inserted immediately preceding “insurance company.” While I just as strongly object to the demonization of health insurers, my point here is that there is a trickle down (perhaps “torrent” would be more apropos!) to all forms of insurance, life insurance included.

Underlying this vulnerability is what I consider objectionable anti-capitalist dogma and a host of damaging suppositions becoming more widely treated as truths. Predominately that profit is inherently evil, rather than the fuel by which goods and services are able to be delivered. The natural extension of this is that those who have more are evil, jealously hoarding wealth while callously ignoring the needs of the less fortunate, rather than those who have worked hard, innovated, and justly deserve the fruit of their labors for their own use and to improve the lives of their heirs.

I harbor little delusion that my philosophy is fraught with its own set of inconsistencies, ignorance and faulty premises, but the question I pose is how do we as an industry combat what amounts to class warfare and reinforce the core benefit that only life insurance can provide: help to families in need due to the premature loss of a primary breadwinner. I’ll bet many if not most of you have had the bittersweet privilege of delivering a death claim to a grieving widow (or helping someone who’s become disabled or requires long term care file claims and receive those benefits). Few if any of those recipients view those policies as unnecessary, ill-advised or naively helping to feed a predatory, monolithic institution. But despite the best efforts of the Life Happens organization and others using real life examples of the benefits of insurance to sway the public to action for the benefit of their families and to change public opinion about life insurance (and disability income), these voices pale in comparison to the reach of ill-considered phrases broadcast on virtually all mainstream media outlets.

Every dollar that can be sent to Life Happens directly helps (www.lifehappens.org). But what else? On the company side, a shift back to consumer advertising focused on serving families in times of crisis rather than wealth accumulation and retirement security couldn’t hurt. What about you and your practice? Do you seek out middle and lower income individuals to help them protect their families from need and see their wishes for their children’s futures realized?

You have a responsibility to feed your own family and the right, I believe, to grow a legacy through hard work and dedication to service for your clients. Policies for the less affluent yield lower commissions, naturally, and the time commitment to see them through from prospect to application to issue is time that invariably could be spent more profitably. Some wholesalers have term platforms for agents that can help with these concerns, our friends at Broker’s Service Marketing Group and their tioTERM platform, to name just one. Those working diligently in worksite sales impact a great number of these less affluent consumers. But these things aside, the more pressing question is: Do you as a life insurance professional have a responsibility to seek out these prospects and work to find them coverage?

In contrast to the picture I believe many would paint of our industry and those working in it, I have found most agents, wholesalers and carriers I have come in contact with to be very generous in their support of a variety of charitable causes. I just returned from the BSMG charity golf tournament where their carriers, staff and agents raise an average of $70,000 per year to divide among several local charities in the Providence, Rhode Island area. I’m confident many of you are not slow in showing monetary support and likely volunteer time for causes you embrace. Many may tithe to your faith-based organizations to support the good work they do. Some churches and religious institutions have found that technological solutions, like Tithe.ly, have made it easier for their congregations to support them monetarily.

Let me float this as a way you can, one prospect and family at a time, both change the perception of our industry and fulfill the divine purpose of the protection life insurance offers: Tithe your time to reach those less-than-affluent families and help them find the protection life insurance offers. [SPH]

How do you tell when a government official who is pontifi­cating about the ACA is lying? His lips are moving.

The Centers for Disease Control and Prevention’s (CDC) National Center for Health Statistics, reporting data from the 2013 National Health Interview Survey, indicated that through the first nine months of 2013, 45 million people were uninsured at the time of the interview, 56 million had been uninsured at least part of the year prior to the interview, and 33.7 million had been uninsured for more than a year at the time of the interview. Figures for adults aged 18-64 over the same period were 20.5 percent uninsured at the time of the interview, 16.5 percent had public health plan coverage, and 64.4 percent had private health insurance coverage. Yes, the percentages add up to more than 100, but any rambling that involves “Mystics with Statistics” needs to start somewhere.

So where does the number of uninsured Americans sit now after the ACA enrollment period? Whitehouse.gov claims that “over 7 million people have signed up for private health coverage”—presumably through the Health Insurance Marketplace. Gallup says that the percentage of uninsured declined from 18 percent in fall 2013 to 15.9 percent through the first two months of 2014. The Rand Corporation estimates a decline from 20.9 percent last fall to 16.6 percent as of March 22—but those numbers reflect only those aged 18-64. Rand suggests that there has been a net gain of 9.3 million American adults with health insurance coverage from September 2013 to mid-March 2014. In their analysis they postulate that of the 40.7 million uninsured, 14.5 million gained coverage, while 5.2 million of the insured lost coverage. Their 9.3 million number represents not only people who enrolled in marketplace plans, but also gains in employer-sponsored insurance (ESI) and Medicaid expansion. They estimate that enrollment in ESI increased by 8.2 million; Medicaid enrollment increased by 5.9 million; and 3.9 million were covered through the state and federal marketplaces, but this last figure does not fully capture the enrollment surge that occurred in late March. Admittedly I can be about as sharp as salad tongs when it comes to assimilating numerical data beyond the scope of my fingers and toes, but there seems to be no way to achieve a clear picture of the actual number of the previously uninsured now finding coverage due to the ACA—a number to which taxpaying Americans should be privy absent the misdirection foisted upon them by their elected officials.

The Rand estimates were extrapolated from a small survey—2,425 adults between the ages of 18 and 64 who responded to both the September 2013 and March 2014 surveys—to the entire United States population, and they admit a margin of error for the newly insured of 3.5 million people. But at least one conclusion that they draw seems quite supportable—the ACA has led to a substantial increase in insurance coverage, not only from new enrollment in the marketplaces, but also from new enrollment in ESI and Medicaid.

That many Americans are being helped is undeniable. The elimination of pre-existing condition denials as well as elimination of lifetime and annual dollar limits stand out immediately. That many will see a substantial improvement in their quality of care seems likely. But in my view, also likely is that the ACA is flawed and unsustainable as it stands without incurring monstrous cost.

As important in this forum is the question of how agents working in the health insurance industry are to find a role that enables them to continue to serve clients valuably and find a way to thrive financially. Diversifying your practice with new markets and products; helping employers work through all plan options both in and outside the exchanges, combined with more in-depth fact-finding about owner and employee coverage gaps in other areas; and voluntary product offerings and wellness programs to increase the appeal of benefits packages seem to be a few of the service-oriented directions most frequently discussed.

Broker World would like to formally thank monthly columnist Jack Marrion and Jeremy Alexander of Beacon Research for their invaluable work in putting together this year’s Fixed Annuity Marketing Analysis. Beacon Research was founded in 1997 by Alexander and sets the industry standard in quality annuity data. They started the industry’s first and only quarterly study to track and analyze fixed annuity sales at the product level, as well as the first credited rate benchmark series, and now include indexed and variable annuities in their database. Beacon offers a suite of products including: AnnuityNexus Market Intelligence—a fixed product and interest rate research, reporting and support tool designed for annuity issuers; AnnuityNexus Sales Support—a fixed annuity support tool created to help wholesalers compare products; the Fixed Annuity Premium Study—fixed annuity industry, company and product-level sales reports and analytical tools; and Variable AnnuityNexus—with variable product profiles, documents and Beacon’s VA Tracker. For more information visit www.beaconresearch.net.

Fortuitous timing perhaps, as our friends at NAILBA have informed us that they have joined with the Coalition for Annuity Awareness, comprised of industry associations who serve consumers by helping them understand annuity products, in declaring June National Annuity Awareness Month. Along with other members of the CAA, NAILBA will provide educational material, webcasts and social media communications to help educate financial professionals and the public on the important role fixed and variable annuity products play in helping Americans save for retirement. [SPH]

Roughly 78 million strong, baby boomers represent the largest population segment in American history, and more than 10,000 of them reach age 65 every day—and will through 2029. Boomers are now between 50 and 68 years old and there is much our industry can do to help them. There is still significant time for many to accumulate assets to fund retirement,  to protect their income during these crucial top-earning years, to make retirement income plans that are sustainable throughout life for those entering the disbursement stage, and to transfer risk in order to protect assets in the event of a critical illness or long term care event. The insurance industry has myriad products designed to help these clients face an uncertain future with relative peace of mind. Six approaches to serving this market are explored by our focus authors in this issue.

Brokerage general agent marketing and study groups trace their roots as far back as 1961 with the formation of the SUB Centers study group, created “to promote high ethical standards and to increase efficiency and cost effectiveness through the standardization of materials and methods. To foster an interchange of ideas that might benefit each member and better serve the life insurance industry through the collective talents of all.” The organization was born at the end of the boomer generation, and I certainly hope they are still active and strong beyond turning age 65 in 2026!

Originally formed as networking groups to advance the best practices, proficiency and professionalism of their member agencies, these study groups also counted advances in agent education, carrier relations and underwriting savvy as early accomplishments. From these roots sprang the marketing groups with the additional member benefit of production aggregation to maximize compensation.

Today’s marketing groups have evolved into much more than simple aggregation organizations. They are not only embracing but driving innovation in product, service and technology to the mutual benefit of carrier, BGA and broker. Marketing groups now, to varying degrees, offer their member/partner agencies not only diverse product offerings but shared marketing expertise, service enhancement and expediency experience, best practices refinement, technology insight and infrastructure, case management and advanced sales support, sales training ideas and assistance, education, processing, and not only internal underwriting consultation, but also assistance through, in many cases, vastly enhanced and extensive carrier underwriting department relationships. Most marketing groups today take great pride in honoring their carrier relationships with consistent efforts to increase both the quantity and quality of business submitted, committed to viewing the relationships with carriers as partnerships rather than vendor/customer arrangements.

In this issue we provide an overview of 24 of these marketing and study groups to provide both BGA and agent a glimpse of each group’s stated purpose and opportunities.

The artist(s) formerly known as the LIFE Foundation has unveiled a new look, complete with a new name and a newly redesigned website. LIFE will now be called Life Happens, aligning the organization more closely with its online presence best known to consumers and the industry—lifehappens.org. The move coincides with the organization’s 20th year of striving to reach the millions of Americans who are inadequately insured and inspire them to take personal financial responsibility through the ownership of life insurance and related products.

“In the 20 years since we were first founded, a lot has changed in how we communicate to, and interact with, the public, and it made sense to align our organization with how people have come to best know us—through our online presence,” said Marvin H. Feldman, CLU, ChFC, president and CEO of Life Happens. The new brand links the nonprofit organization with its strongest assets—the lifehappens.org educational website and social media properties.

The redesigned www.lifehappens.org is mobile-friendly and prominently features a new, interactive planning tool to help visitors find insurance information based on their specific stage in life, as well as easy access to online insurance needs calculators and video stories from real people conveying the emotion behind the reason to purchase a policy.

Life Happens has also created a distinct online destination for industry professionals to make it easier to find the information, marketing resources and customizable tools relevant to them—simply by clicking on the “Company and Agent Resources” button on the home page or via www.lifehappens.org/industry.

In addition to the familiar Life Happens initiative Life Insurance Awareness Month in September, Life Happens also is responsible for Disability Insurance Awareness Month—May. In our April issue we presented a DIAM planning panel, aided in no small part by the Life Happens organization and friends Mike Keenan, Maggie Leyes and Cindy Gentry, whom I thank again. [SPH]

Good News! On Monday, July 12, the United States Court of Appeals for the District of Columbia completely vacated 151A.

So, what does this mean? It means that the court effectively settled 151A. As far as the judicial branch is concerned, there is not sufficient evidence to suggest that indexed annuities should be regulated as securities. The court also reissued the entire ruling with the new language.

Here is language from the court’s order: “Having determined that the SEC’s Section  2(b) analysis is lacking, we grant the petitions insofar as they assert the SEC failed properly to consider the effect of the rule upon efficiency, competition, and capital formation…We therefore order that Rule 151A be vacated.”

Is the securities status of indexed annuities settled for good? According to Sheryl Moore, Advantage Group Associates, Inc., “No. Remember, the Securities and Exchange Commission first questioned the securities status of indexed annuities in 1997. They did so again in June of 2008 with their proposed rule 151A. If we want to ensure that indexed annuities will be regulated as fixed insurance products indefinitely, we need to continue our current legislative strategy.”

NAFA is indicating that if the Harkin Amendment passes (which it looks like it will), the law will legislate out the existence of 151A (meaning that the SEC will not have the power to pass regulations deeming FIAs as securities). [SAC]

Jerry L. Thomas
1925–2010

The brokerage industry has lost another icon — Jerry L. Thomas, founder and chairman of J.L. Thomas & Co., Inc., Cleveland, OH, passed away July 5.

In 1950, after graduating from the University of Pennsylvania Wharton School of Finance with a degree in economics, Thomas began his insurance career with Prudential, joining his father Willis B. Thomas, a Prudential agent for 40 years, in Pittsburgh, PA. Jerry received his CLU in 1953, presented by Dr. Solomon Huebner, founder of The American College and Thomas’ economics and insurance professor at Wharton.

Thomas moved to Cleveland in 1962 to manage the Acacia Mutual Life office, then joined State Mutual in 1964, where he was a very successful brokerage manager and assistant general agent. He and a partner started a brokerage agency from scratch in 1970. He bought his partner out and renamed the agency J.L. Thomas & Co., Inc., in 1979.

Many brokerage agencies are family firms, but few if any can claim to have three sons working together for more than 30 years. Michael, David and Craig, who run the agency today, claim that accomplishment as a testament to the fact that their father always treated them equally—evidenced by even the absence of titles on their business cards. The brothers attribute their success to values their father passed down to them— honesty, integrity, experience, work ethic and knowledge—combined with the fact that their father believed in life insurance in his heart. A staunch believer in the independent brokerage distribution system, his entrepreneurial mantra was “Free to Succeed or Fail.” A son-in-law, James Kelly, also contributes at the agency, as does grandson Jerry Thomas, who joined the firm in January.

In addition to the CLU, Thomas’ industry accomplishments include being a member emeritus of the Society of Financial Service Professionals, having been a member for more than 50 years; past president and board member of the Cleveland CLU chapter; 50 year member of NAIFA and its predecessor NALU; charter member of NAILBA; and past president of SUB Centers. The agency is a charter member of the NAILBA Charitable Foundation and a partner in LifeMark Partners.

At Jerry’s direction, J.L. Thomas & Co. contributed to many local charities and community sponsorships; one was the J.L. Thomas baseball team, which was sponsored from little league into the players’ college years.

Described by his sons as truly a great father and husband, Jerry was preceded in death in July 2009 by Larna, his beloved wife of 58 years. He is survived by his daughter Jane Ann Kelly and husband James; Michael and wife Michele; Craig and wife Stella; and David and wife Paula.

An accomplished trumpet player, he passed his love of music on to several of his eight grandchildren. He enjoyed spending winters golfing in Naples, FL, and his summers bass and muskie fishing at the family’s cottage on Crane Lake in Ontario. Bought through tenacious bidding at a Canadian government land auction, it became his favorite place in the world for more than 40 years—in large part because all members of the family have shared the best times of their lives together there.

Thomas proudly served his country in World War II in France and Germany with the 89th Infantry Division of the United States Army, yet never spoke much about it despite receiving seven decorations and citations, including two bronze service stars.

We say goodbye to another of the brokerage industry’s great men and a member of “Our Greatest Generation.” Rest in peace. [SPH]