Dear IMSA Friends:

I hope you had a great Presidents’ Day and a Happy Valentine’s Day too.  There are lots of things going on.  Here’s a summary:

Executive Summary:

·    IMSA CEO Sees Current Crisis as Time for Organization
·    Numbers to Make Us Think
·    Federal Insurance Bill?  Yes.  Bailout for Insurers?  No.
·    Highlights from IMSA Today  February 6, 2009
·    Best Practice of the Month and some examples from top companies.
·    Flash Survey: Onboarding Of Independent Agents From Large IMOs
·    What’s happening at the Kenneth J Kalis Company?
·    Did You Know?  We write for you!
·    Non-IMSA close:  A generic story with a specific, timely reference.

Quote of the Month:

“These proposals to have a federal charter have a lot of merit and we’ll look at them very carefully, and my personal view is that’s likely to be an important part of the plan.”
–- Timothy Geithner 

IMSA CEO Sees Current Crisis as Time for Organization

In an interview published by BestWire on February 26, IMSA’s Brian Atchinson called for the life insurance and annuity industry to organize and be prepared for additional oversight.  Atchinson likened the current financial crisis to the environment in the late 80s and early 90s, when the industry was plunged into a time of uncertainty due to some highly publicized law suits of large insurance companies for ethical market conduct infractions.

Advocating for the consumer, the IMSA executive said that consumers base their buying decisions on trust and confidence, and that there’s a tremendous concern that some of the problems of the past may resurface in this environment if efforts to boost sales are done at the expense of consumers.

In the mid-90’s, life insurance company CEO’s joined in a panel that created IMSA to bolster public confidence and to help the industry recover from flat sales and an erosion of trust that the ACLI’s MAP survey showed was at 17%, lower that for used car salesmen.

The article quoted Atchinson as saying "If there was ever a time that was similar to the late 80s and early 90s, this is it."

The CEO pointed out that the IMSA standards then "were the ceiling, but now are the floor."  Those standards drew widespread support across the industry as virtually every major company committed themselves to ethical market conduct and thereby rebuilt the lost trust and slowly but surely watched their markets come back.

Atchinson said he views the current market conditions as being a critical time in the life insurance business as consumers make their buying decisions based on trust and confidence, while maintaining the industry is positioned to be a major component of people’s financial planning. But he said “there’s a tremendous concern and risk that some of the problems of the past may reappear if the effort to bring sales into the door is done so at the expense of consumers.” This, he said, leads to short-term gains but has long-term consequences.

Speaking on federal oversight, the industry leader said that IMSA understands that “the regulatory landscape is going to be rewritten,” and that IMSA expects to be part of the ongoing developments.

 “It won’t be easy," he said. “Whatever the outcome is, we’ll support a healthy competitive marketplace, but keep the interests of consumers in mind."

Video of the interview with Atchinson can be viewed at www.ambest.com.

http://insurancenewsnet.com/article.asp?n=1&neID=20090226200.1_aac1001314f2b84e

Numbers to Make Us Think

Remember when the public’s trust level for life insurance agents was 17%?  (If not read the previous article.)  If you thought that was bad.  Take a look at these numbers below, from the financial confidence survey just taken by PR firm Cohn & Wolfe and reported in the January 26 edition of Insurance Compliance Insight:

Financial institutions?
Greedy 32%
Impersonal 32%
Opportunistic 26%
Distant from me 22%
Trustworthy 13%
Honest 10%
Ethical, transparent or sympathetic 5%
Little hope financial services industry will help them regain losses 66%
Expect such help from financial services industry 8%
Unsure 27% 

Nearly 8 in 10 say they’d welcome increased regulation of insurers and other financial services companies. 

What to do?  Cohn & Wolfe’s EVP Matt Wolfrom:  “One key reason for the distrust is that companies have simply not connected with consumers.  Consumers tell us they need advice and information during these challenging economic times.  Companies that engage with consumers will find their brands rewarded with more loyalty – and business.”

You can read more at: http://www.inscompliance.com/custom.cfm?name=aldIssueView.cfm&id=20E74816-6FE6-4C6A-A1AF8E7B921313E4

Federal Insurance Bill?  Yes.  Bailout for Insurers?  No. 

There’s too much going on in Washington for me to keep up with.  But I do read Insurance Compliance Insight, which does a great job in covering issues of interest to IMSA companies. 

The headline above is a great example.  Here’s a little detail from the February 16 edition: 

IMSA Today                                                          February 6, 2009

Anti-Money Laundering Survey Released Today

IMSA’s Anti-Money Laundering (AML) Working Group today released a survey to gather information from companies on their AML practices. More industry intelligence is needed regarding proof of training as well as Customer Identification Program practices.

Contact John Dohmen at (240) 744-3023 or JohnDohmen@IMSAethics.org with any questions you may have.

Annuity Suitability – AARP & IMSA to Host March 3rd Summit

IMSA and AARP will co-host Compliance & Consumer Protection in a New World, an annuity suitability Summit meeting in Washington, DC on March 3, 2009. The Summit will bring together representatives of IMSA-qualified companies, regulators, consumers, and distributors to discuss:

·               Supervision & Monitoring
·               Disclosures
·               Regulatory reform

Regulatory Reform Advances

IMSA has recently been invited to meet with staff at the U.S. Department of the Treasury, U.S. House of Representatives Financial Services Committee and FINRA to provide input on proposed regulatory reform. It is expected that Congress will act by April, 2009, to address “systemic risks” including large insurance and other financial institutions that will come under some federal authority. Most details will be worked out in the coming months, including the future role of the states, federal government and self-regulatory organizations.  

 Online Resources Are More Important in a Tight Economy 

IMSA’s new web site will launch on Wednesday, February 25, 2009, in conjunction with the first IMSA Board Meeting of 2009, and will include a variety of new online tools and information to help IMSA members reduce travel and other expenses while still getting the information they need.  

The contact for IMSA Today is Jennifer Kalita at JenniferKalita@IMSAethics.org.

Best Practice of the Month – February 2009 

Upgrading your standards!  In the first article of this Update, Brian Atchinson noted that the original best practices that served as a ceiling for IMSA back in the 1990’s are now little more than a floor.  Companies are raising the bar all the time.  I remember one best practice I cited for giving customer service reps up to a $250 waiver authority.  Last year I found a company that used $2500!  In another twist on this, one company gave its complaint resolution unite the right to sign off on anything up to $25,000!  This is the kind of continuous improvement the IMSA process stimulates.  Let us know what bars you are raising.

Thanks for Your Help on our Survey! 

Several times a year, the Kenneth J. Kalis Company is asked to do a short survey of the 100 or so companies in our universe concerning some issue of concern.  The one we are working on now is about the Onboarding Of Independent Agents From Large Marketing Organizations.  There is, of course, a desire to do thorough background checks, etc. on all producers, but this is not cost effective if only a handful out of several hundred actually write new business.

Anyway, we asked for your input and got several very useful comments.  We fielded the survey last month and got only 4 or 5 responses.  We sent it out again earlier this week and encourage you to complete it.  Personal invitations are next!  Thanks for your help.

What’s Happening at the Kenneth J Kalis Company?
We are still in the process of moving our office from Alachua back to Gainesville.  Will let you know the new address and phone number as soon as everything has been finalized.  Our 386-462-1074 number is still active, but if you need to reach us immediately, please call our cell at 352-215-9124. 

On Tuesday, we plan to travel to Washington for the annuity summit and then the Standards Committee Meeting at IMSA’s offices in Bethesda.  We will plan to update you as usual next month.

Can we be of help to you?  Just give us a call at 352 -505-0705

or send us an email at kkalis@aol.com.  You’ll be glad you did!

Did You Know….. 

We can write for you? 

Of course you all see our “journalistic” stuff each month.  But we also do other things: 

·    Help you design customer communications that are friendly and easy to understand. 

·    Work with you on writing policies and procedures. 

·    Write Compliance Handbooks and Manuals. 

·    Help design clear, easy to understand suitability forms, annual statements and customer outreach letters. 

We love to write, and even do a little bit of editing for the graduate students at the University of Florida, just for fun.  If there’s anything we can help you with, please call at this new number: 

352-215-9124

or simply respond to this email from kkalis@kkalis.com.

Thank you for your continuing interest in IMSA and ethical market conduct.  Things are good, but our assessment schedule is slow.  Let me know if there’s anything I can do to help you along on your IMSA journey.   II    

Photo by Patricia Kalis, 1/31/09
Ken Kalis
352-215-9124
Only Believe. Mark 5:36