Dear IMSA Friends:

September is on its way out, and those autumn leaves are ready to fall.  Its been a great month for IMSA and many of our ongoing efforts.  Please read on:

Excelsior

Third Quarter, 2007      Volume IX, Issue 3

Ethical Market Conduct Issues for Presidents and Senior Executives

.Excelsior on Its Way

Our 3rd Quarter Excelsior newsletter is already up on the web.  You can check it by clicking here, or wait for your hard copy arriving next week.  Be sure to check out these items:

• The CEO and IMSA:  An analysis of the role of CEOs in creating and supporting IMSA.

• Fighting those “Self-Assessment Blues”?: Can you use IMSA to manage all your self-assessments? 

• Annuity Sales, Suitability and Seniors:  IMSA’s efforts in a key area.

• Highlights from Atchinson Letter to Senate Special Committee:  More detail on above.

• Kalis IMSA AIMS:  Announcing our 2007 company AIMS: Affordable, IMSA, Management Services.

• Excelsior Awards:  Why we give out our Excelsior Awards.

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• Best Practice Corner:  More ideas in this popular section.

Chicago is My Kind of Town!

This is the view each morning as I walked to IMSA highly successful Suitability Summit and Best Practices at Chicago’s Marriott Courtyard on Ontario Street.  I arrived on Tuesday for the Summit and was impressed by the great attendance and free exchange of ideas.  Be sure to read IMSA’s article on it following. 

Regulators, Companies Wrestle with Interpretation of Suitability Regulation - Summit Offers Unique Opportunity for Dialogue

Chicago, IL (September 19, 2007) – Companies selling annuities need guidance to interpret key provisions of regulations in 30 states based on the NAIC Suitability in Annuity Transaction Model Regulation.

At a unique half-day forum in Chicago on Tuesday, 12 insurance regulators and representatives from FINRA and NAIC met with more than 50 compliance professionals from life insurance companies for the first time to discuss the scope and interpretation of regulation provisions such as periodic reviews, delegation of supervision to a third-party, and FINRA’s “safe harbor” as well as the needs of companies and distributors for consistency and predictability in regulatory oversight. Thus far, it has been reported that some states are taking widely divergent approaches to overseeing companies’ compliance with the regulation that is designed to ensure consumers’ annuity purchases are “suitable.”

“This type of exchange brings regulators, companies and broker-dealers face-to-face to find the best ways to comply with this regulation and meet the needs of consumers considering annuity products,” said IMSA President & CEO Brian Atchinson. “This is important because ultimately, consumers will pay the extra cost of the overlapping and duplicative regulation that’s out there today.” www.IMSAethics.org

Best Practice Workshop Highlights

About 60 people attended this year’s IMSA Best Practices Workshop.  Many of them thought this was the best one yet, The Kenneth J. Kalis Company was a sponsor.

FINRA’s Larry Kosciulek speaks and answered questions at the Workshop for IMSA Companies.

Allstate’s Jo Reimers, AIG’s Dianna Osmonson and ING’s Carol Stern give one of the best-received presentations on Compliance Reporting to Management.

If It’s Monday It Must Be Washington

It was great to be in Washington again for Jim Buddle’s retirement dinner and the IMSA Standards Development Committee meeting.  Jim’s leadership on the committee will be missed.  We need another person of his stature and commitment to step forward.  Why not you?  IMSA belongs to the companies, and the more you give, the more you will get out of the experience.

 

Members of IMSA’s Standards Development Committee honor retiring chairman Jim Buddle for Genworth Financial at Ruth’s Chris Steakhouse in Bethesda.

Familiar faces around the table.

Jim Buddle chairs his final meeting as chairman of the IMSA Standards Development Committee.

Wednesday?  On to Greenville, SC

We were also proud to be a sponsor of the 87^th meeting of the Life & Health Compliance Association hosted by RBC Insurance in Greenville.  105 people attended from 73 companies; I was the only IMSA QUI there.  These are great and inexpensive meetings.  You can send in any question in advance, and it is discussed by the group.  You can also sign up for a one-on one session with the regulators attending, (this meeting’s folks were from SCDOI, NCDOI and SERFF).  I think they are the best value in the industry.  You can sign up for the next one (in Tallahassee in January) at www.lhca.net.  

 

The real Ken Kalis next to his picture at our table at the LHCA meeting in South Carolina.

Best Practice of the Month

Compliance Part of Top Executive Scorecard

Every company has a top line scorecard that is used by the top executives to manage the business.  This report always includes sales in terms of new business premium.  The other items shown vary by company but usually are expense, conservation and something.  Sometimes recruitment is there or number of producers. Less often you will see renewal premiums. What is not there is compliance, at least not for the vast majority of companies. We noted a best practice in this area back in 2005, and to date, that remains the only instance we know of where compliance has made it into this important document.  The company we gave an Excelsior award to for this, simply had “Compliance” listed and gave a score based on a number of factors, including complaints, litigation expense, and meeting IMSA monitoring standards.  That’s a good starting place.  You may want to vary the ingredients but the key is getting something having to do with compliance into this top line report. 

¨      Impact: Keeps Key Compliance Concerns Visible

¨      Impact: Keeps Processes on Schedule and Budget

¨      Impact: Compliance Simply Part of Business Culture

Hope you’ve enjoyed this issue.  Please let us know if you have any questions or would like some help in managing your IMSA preparation or assessments.  386-462-1074 or KenKalis@gmail.com. 

Thanks for your continuing interest in IMSA and in ethical market conduct.