Dear IMSA Friends:

July is history, and it’s time for another monthly update.  This will be a short one, as we’ve just mailed out the summer edition of our Excelsior newsletter and, for the first time, attached a copy for the readers of this update.  Here now the News! 

Just in time” licensing and many more best practices awarded at ACLI meeting in Boston.
UPDATING THE IMSA process….. Full details in attached Excelsior newsletter.
L O-N-G-E-R     W-I-N-D-O-W for former IMSA members.
You may have to update your data base for 2010.

 

News from IMSA Today!
EXCELSIOR enroute via USPS and this email.
Webinar on  REPLACEMENTS.

SPOTLIGHT  your compliance successes!
Just in time” licensing and many more best practices awarded at ACLI meeting in Boston.

The Kenneth J.Kalis Company presented its Excelsior Awards for best practices to the John Hancock Companies,  Midland National Life and NACOLAH and TIAA-CREF Life Insurance Company at the ACLI Legal and Compliance Section meeting in Boston last week.  This is the tenth year we have presented the beautiful plaques to deserving companies.

Based upon the standards used in the Malcolm Baldrige National Quality Award, our Excelsior best practices are top quintile processes that are leading the way in the industry, have been improved by the company and are often the target of benchmarking by others companies looking for continuous improvement.  We recognize best practices from the companies we assess and also share with each company the best practices we have recognized in the past from the 50+ companies we have worked with.

UPDATING THE IMSA process….. Full details in attached Excelsior newsletter.

L O-N-G-E-R     W-I-N-D-O-W for former IMSA members.  The IMSA Board has extended the “streamlined” reassessment process for former IMSA members through 2010.  Read all about it in the attached edition of Excelsior.

You may have to update your data base for 2010.  If you haven’t already done so, you must move to the topic based approach in 2010.  This means reorganizing your company data base, or your KP4 IMSA software to the new TBA format.  One way of doing this is to use the free IMSA templates that all new companies must use from now on.  Another is to use our KP4 IMSA TBA software designed specifically for this (which includes in the new format the indicator addresses of the Principle based materials).  Still another is to have your Qualified Independent Assessor do it for you.  Give us a call at 352-505-0705 if you’d like our help.

 News from IMSA Today!

July 31, 2009

Social Networking – New Survey Release

IMSA recently issued a benchmarking survey of IMSA-qualified companies on the use of social networking websites by insurance producers as a means to promote themselves, their distributors and/or a company's products. The survey was distributed to IMSA-qualified company compliance officers and marketing personnel. Based upon the information gathered from the survey, IMSA and its committees will consider developing standards, guidelines and/or practices pertaining to the growing use of social networking websites.

 Because there is a significant range of potential compliance-related issues associated with these practices, we appreciate your timely input to our survey. Please contact Margie Lopez at MargieLopez@imsaethics.org if you have not received an invitation to complete the survey and would like to do so.

 Replacements Webinar - August 6th

Next week, IMSA will host the second in its series of Compliance Best Practices Workshop Webinars on Thursday, August 6 at 2:00 p.m., EDT. The focus is on replacements. Andrew Shainberg and Debbie Corej of Prudential, along with Mitch Jeske of AEGON, will serve as presenters for the event. The webinar format allows participants to submit questions in writing or ask questions via live conference call during the course of the webinar and to engage in discussions about:

organizational practices designed to address current compliance challenges associated with replacement activity;

monitoring strategies to detect inappropriate replacement activity,

and practices associated with communicating monitoring outcomes with third-party distributors.

 

Participation in the webinar is limited to representatives of IMSA-qualified companies and IMSA-qualified Independent Assessors. Please contact Margie Lopez at MargieLopez@imsaethics.org to register.

 VantisLife Achieves IMSA Membership Qualification

Congratulations to VantisLife Life Insurance Company on obtaining IMSA qualification! IMSA President & CEO Brian Atchinson applauds VantisLife for successfully completing the rigorous, independent review of its marketing, sales and compliance practices necessary to attain IMSA qualification. 

FDIC Update – Regulatory Reform & Related Issues

FDIC Chair and former IMSA Board of Directors member Sheila Bair and her senior staff recently met with IMSA CEO Brian Atchinson to discuss a wide range of issues pertaining to financial services and regulatory reform. Hers has been a leading voice on various strategies to address systemic risk issues and consumer protection in the financial services marketplace. Her recent testimony before the House Financial Services Committee recommended the need for developing practical solutions, similar to those which exist for FDIC-insured banks, to address the potential failure of institutions that may pose systemic risk issues. IMSA will continue to monitor these activities closely as reform efforts slowly move forward, possibly extending into 2010 due to Congress’ focus on other issues in the near term.

  IMSA Leads ACLI Ethics Panel

At last week’s ACLI Compliance & Legal Sections Annual Meeting, IMSA’s Don Walters moderated a panel discussion of ethics with Lee Augsburger, SVP and Chief Ethics and Compliance Officer (Prudential Financial), Ed Clemons, SVP and Chief Human Resources Officer (Penn Mutual) and Kris DiGirolamo, Director Enterprise Ethics & Compliance (Allstate). Recently reported statistics related to academic dishonesty suggest continued ethical challenges for organizations as they hire the workforce of the future. A copy of the presentation materials outlining the findings of several ethics-related studies can be found at www.IMSAethics.org.   Upcoming MeetingsSome upcoming industry events in which you may be interested include:

July 17, 2009

 Joint Drafting Session:  Annuity Suitability Interpretive Guidance

IMSA participated in a joint drafting session yesterday with representatives of IMSA-qualified companies and other associations to develop the elements of interpretive guidance and proposed modifications to the NAIC Suitability in Annuity Transactions Model Regulation.  This session was a follow-up to discussions that took place at the recent NAIC Summer National Meeting with respect to providing guidance to companies and regulators to interpret key provisions of the Model Regulation.  More than 40 states have now adopted some version of the Model Regulation.  

The participants in the drafting session reviewed key concepts, including:

clarifying the information a producer needs to gather from a customer in order to conduct a suitability analysis;

identifying the basis for suitable recommendations;

outlining the elements of supervision and monitoring systems;

and establishing training requirements.   

The concepts embedded within the interpretive guidance will be reflected in proposed modifications to the Model Regulation as well.  The drafting group also plans to develop an explanatory “cover letter” that will seek to explain how these documents can be used to promote suitable annuity sales in the states. 

Revised drafts of these documents will be developed as soon as possible and will be provided for further review and comment by the IMSA Annuity Suitability Working Group, IMSA Standards Advisory Committee and other IMSA-related stakeholders. 

The drafting group agreed to continue to meet via conference call to discuss alternative strategies with respect to the use of these documents.  We will continue to keep you apprised of future developments concerning this important initiative.

AARP Interviews IMSA about Consumer Annuity Confusion
AARP’s nationally-syndicated Prime Time Radio program features an interview this week with IMSA CEO Brian Atchinson about helping consumers to understand their options when it comes to purchasing an annuity.  The show will air on radio programs across the country and is also available on the AARP web site.

You can also link directly to the interview itself at http://www.aarp.org/aarp/broadcast/aarp_radio/radio_prime_time/articles/annuities.html.

   IMSA thanks AARP for this opportunity to create such significant exposure for IMSA-qualified companies in the eyes of consumers. 

Clearinghouse Update – 900 Distributors on Board!

Nearly 900 Third Party Distributors are participating in IMSA’s Annuity Suitability Certification Clearinghouse!  Many insurance companies have noted the savings of time and money by using the Clearinghouse to fulfill the certification requirements of the NAIC Suitability in Annuity Transactions Model Regulation (that has been adopted by more than 40 States).

 IMSA is pleased to announce a new Annual Subscription Fee pricing schedule for those companies that use the IMSA Annuity Suitability Certification Clearinghouse.   The new Annual Subscription Fee pricing schedule will provide a discounted subscription fee based upon the volume of certifications obtained by a company.  For a copy of the new pricing schedule, please visit IMSA’s Clearinghouse website at www.Clearinghouse.IMSAethics.org, or simply click on “Clearinghouse QuickStart” at www.IMSAethics.org. 

July 2, 2009

 

SEC Update – Regulatory Reform & Related Issues

Earlier this week, Mary Schapiro, Chairperson of the U.S. Securities and Exchange Commission (SEC), met with IMSA CEO Brian Atchinson to discuss the changing landscape of regulatory modernization. Ms. Schapiro shared her views on the SEC’s role and future plans in the regulatory reform debate, and offered her perspective that the life insurance industry may be well suited to a self-regulatory organization structure. The discussion also addressed current annuity suitability matters and IMSA’s work on a variety of issues. IMSA and the SEC agreed to maintain communication as initiatives move forward on matters pertaining to life insurance, annuity and long-term care insurance product issues.  

 

Insurance Matters on Capitol Hill

·         Last week, IMSA was asked to submit written testimony to the House Financial Services Committee for its June 24 hearing entitled, Regulatory Restructuring: Enhancing Consumer Financial Products Regulation.  A key issue under review at the hearing was whether annuities and other insurance products should be included within the scope of the proposed Consumer Financial Protection Agency. Through uniform implementation of IMSA standards on a nationwide basis, IMSA qualified companies demonstrate their commitment to ethical behavior that allows consumers to have assurance of a sound and fair marketplace to meet their planning and retirement needs.  Therefore, IMSA noted that it may be unnecessary to include annuity, long-term care and life insurance products within the regulatory purview of the proposed Consumer Financial Protection Agency. IMSA's testimony provided to the Committee information regarding the experience of IMSA and its qualified member companies developing standards and solutions to address marketplace issues in a timely manner.

·         On June 30, the Treasury Department submitted the proposed CFPA bill, the Consumer Financial Protection Agency Act of 2009, to Congress. As reported by National Underwriter, the proposed agency would oversee financial advisors but its authority over insurance activities would be limited to that which is “usual in connection with extending credit or servicing loans,” such as the sale and servicing of credit insurance, mortgage insurance and title insurance.  The proposed bill creating the CFPA would exclude “the business of insurance” from the definition of CFPA-regulated “financial activity.”

·         Senate members have introduced S. 1389, a companion bill to the recently introduced Meeks-Price bill (H.R. 2733) in the House, that seeks to exempt indexed annuities and indexed insurance policies from regulation by the SEC. The bill was introduced by Sen. Ben Nelson, D-Neb.

 SEC’s OCIE Director Cautions: Don’t Cut Back on Compliance

Lori Richards, Director of the SEC's Office of Compliance Inspections and Examinations, commented in a speech before a meeting of the Securities Industry and Financial Market Association (SIFMA) that financial service firms must remain vigilant of their ongoing legal obligations to prevent, detect and correct possible violations of applicable laws and regulations and confirm that this obligation exists in both healthy and troubled economic times. 

 

Did You Know…

…that IMSA has a revised Discussion Board functionality in its Member section for IMSA-qualified companies only? Recent IMSA webinar participants noted that the ability to ask questions and exchange strategies with their compliance peers were among the greatest strengths of the webinar. Via the Discussion Boards, you can ask questions of and exchange strategies with your peers at any time on a variety of topics, even anonymously if you prefer. Check your Profile in the Member section at www.IMSAethics.org to confirm that you have access to this valuable peer-to-peer tool.

 To submit comments or to cancel your email subscription at any time, please contact Jennifer Kalita at JenniferKalita@IMSAethics.org

 

EXCELSIOR enroute via USPS and this email.

Webinar on  REPLACEMENTS.  Please see the excellent article in IMSA Today above.

SPOTLIGHT  your compliance successes!

Best Practice for August --  Almost every Compliance Department I’ve seen underreports its impact on the success of its company and especially on the bottom line.  Most compliance people have been so busy doing more with less for so long that soon they may be doing everything with nothing forever!

 

But you can change all of this.  Your CEO will be thrilled to see how much you have contributed to the company, so highlight your successes.  Publish a news letter regularly; copy senior execs on reports and use every contact with them to report on the good things you have done.  Here are three ideas at quantifying some impacts on the bottom line:

·         Do a “Save Report” that regularly shows how much premium you have kept in the company through your conservation and suitability review processes.

·         Calculate, as one of IMSA’s most prominent members does, the difference between what customers and requesting in the complaint process with what you actually settle on.  You’ll be surprised at how much with will be.

·         Contrast the cost of past regulatory examinations and litigation with the lower (or absent) costs you have now due in part to your IMSA assessments.

You may be surprised at the numbers and the recognition you receive when you ask for a bigger budget!