Dear IMSA Friends:

It’s time for our June Update. June is my favorite month. That’s because it’s when I celebrate my birthday,
and also when school is over! As I grow old, school days are gone, but summer remains!

Tell you what I like the best --'
Long about knee-deep in June,
'Bout the time strawberries melts
On the vine, -- some afternoon
Like to jes' git out and rest,
And not work at nothin' else!

James Whitcomb Riley

July Best’s Review article on IMSA. Don’t miss it!

Update from IMSA Today.

New IMSA Board Member and New Companies.

Excelsior Awards and news letter.

Insurance Compliance Insight on Federal Regulation

The new annuity brochure from IMSA.

Excellent summary from IMSA on NAIC meeting.

Marching ahead…IMSA’s fifth cycle begins in 2010

Suitability best practices from June 4 Webinar

"I wonder what it would be like to live in a world where it was always June."
- L. M. Montgomery (creator of Anne of Green Gables

July Best’s Review article on IMSA. Don’t miss it!

Over the past month or so, Ron Panko of Best’s Review has been interviewing key people in the IMSA world for the featured article in the regular “Regulatory/Law” section. You won’t want to miss this important article that features these items of interest:

Ø What’s happened to IMSA’s membership and why.

Ø What are IMSA’s new strategies for the future

Ø Who’s in and who’s out among the top 25 companies

Ø What happened to all the Independent Assessors

Ø How former members can re-qualify

Ø Why should companies belong

I believe you will find the article fascinating, and it’s full of insights from people you know, like Brian Atchinson, Professor Ronald F. Duska, Maureen Closson and, finally and in a very minor role, yours truly, Kenneth J. Kalis. I was pleased to provide Best’s with the 10 Reasons for IMSA Membership that we share with prospective members.

Updates from IMSA Today June 2, 2009

Fidelity Achieves IMSA-Qualification

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

Did You Know…

…that IMSA offers a web-based system called the Annuity Suitability Certification Clearinghouse to facilitate the acquisition of the annual Suitability Supervision Certification as required by the Suitability of Annuity Transactions Model Regulation that has been adopted in over 40 states? The regulation stipulates that if an insurance company delegates the responsibility for supervision of suitability determination of annuity sales to a third party distributor, that company must obtain an annual certification from the third party distributor.

The Clearinghouse contains a Certification template that is completed when a company requests the Certificate for a TPD (Third Party Distributor) enrolled in the system, saving time and costs associated with sending letters, following up and making phone calls to obtain the required Certificates. The nearly 850 TPDs enrolled in the Clearinghouse tell IMSA that it saves them time and they would prefer that every company use the Clearinghouse for the efficiency it offers both the company and the TPD. Many companies are starting the process to acquire the needed Certifications for 2008 and 2009, so now is the time to contact John Dohmen at 240-744-3023 or email JohnDohmen@IMSAethics.org for more information.

IMSA Today June 16, 2009

Annuity Suitability Issues Confronted at NAIC Summer Meeting:

Clear Guidance is Clearly Needed

IMSA participated in the recent NAIC Suitability of Annuity Sales (A) Working Group's meetings at the NAIC Summer National Meeting in Minneapolis to stress the need for clear guidance to be provided in a timely manner to assist all marketplace stakeholders in promoting suitable annuity sales. During its presentations, IMSA emphasized that the perspectives of all marketplace stakeholders need to be considered when developing appropriate solutions to address annuity suitability issues, and confirmed the growing demand for better understanding and greater consistency and uniformity in the application of key provisions of the NAIC Suitability in Annuity Transactions Model Regulation (adopted in some form by more than 40 states).

Last week, in advance of the Summer Meeting, IMSA submitted a Comment Letter to express these concerns to the Working Group, in which IMSA proposed that the NAIC consider developing Interpretive Guidance for key provisions of the Model Regulation as a means to effect more prompt marketplace change. The Working Group distributed IMSA’s Interpretive Guidance Concepts report outlining those specific recommendations. Both documents are available at www.IMSAethics.org.

The Working Group will issue an updated “Exposure Draft” of the proposed changes for comment. Nonetheless, numerous regulators and stakeholders continue to voice concerns about prospects for a tangible outcome in the foreseeable future.

There is a June when Corn is cut/ And Roses in the Seed --
A Summer briefer than the first/ But tenderer Emily Dickenson

Suitability Reviews & Increased Scrutiny: Best Practices Webinar Participants Share Practical Strategies

On June 4th, IMSA hosted its inaugural Best Practices Workshop Webinar, Business as UNusual: Navigating Annuity Suitability in a Changing Economic Climate. Respondent feedback was overwhelmingly positive, and among the components attendees found most helpful were:

The similar but various methods for achieving suitability for annuity sales, and how other companies are handling suitability reviews and developing their review processes.

What types of red and yellow flags would subject a case to increased scrutiny and the verification steps taken during red flag process.

The ability to ask questions and exchange strategies.

The recorded 90-minute webinar is now available to all IMSA-qualified companies at www.IMSAethics.org in the Members section, and the next webinar will be announced in the coming weeks.

New NAIC Annuity Supervision and Monitoring Focus

The NAIC Market Conduct Examination Standards Working Group has agreed to explore ways to incorporate the key concepts embodied within IMSA's Annuity Suitability Supervision and Monitoring Report (developed collaboratively with seven state insurance departments) into the NAIC Market Regulation Handbook. A Subcommittee of the Working Group will be reviewing the IMSA Report and offering recommendations regarding the best ways to incorporate its findings into the Market Regulation Handbook.

Midland National’s Masterson Joins IMSA Board of Directors

IMSA welcomes Michael M. Masterson, Chairman of the Board & Chief Executive Officer of Midland National life Insurance Company and the North American Company for Life and Health Insurance (both of the Sammons Financial Group), to the IMSA Board of Directors. With more than 40 years in insurance, his industry insights will be of great value to the IMSA Board and IMSA-qualified companies.

Producer Advisory Group Tackles Distribution and Compliance Challenges

Last week, in conjunction with the MDRT Annual Meeting, IMSA convened some of the nation’s leading insurance producers and thought leaders to discuss pressing compliance and ethical issues in the distribution and sale of life insurance and annuities. Suitability of sales, regulatory change and producer training were among the key topics explored during the meeting, and attendees agreed to continue this needed dialogue as a formal IMSA Producer Advisory Group.

“As an industry, we can discuss regulatory reform and suitable sales all day long,” said IMSA CEO Brian Atchinson, “but if we don’t keep our eye on consumer protection, and how industry and regulation modernization impacts the person behind the paperwork, then broken consumer trust cannot be restored.” He adds that “IMSA strives to create market conduct and consumer protection standards across the country that are both consistent and predictable, and discussions with these leading producers on the front lines are critical to the process.”

IMSA Executive Retires

IMSA wishes to extend our congratulations and thanks to longtime IMSA Vice President and Treasurer, John Dohmen, as he embarks upon retirement later this week. John will continue to contribute to IMSA’s work in a consulting capacity in the coming months.

“It is better to be a young June-bug than an old bird of paradise” -
Mark Twain

Upcoming Meetings

Some upcoming industry events in which you may be interested include:

July 9-12 NCOIL Summer Meeting – Philadelphia, PA

July 22-24 ACLI Compliance & Legal Sections Annual Meeting – Boston, MA

New IMSA Board Member and New Companies.

Michael M. Masterson, CLU, ChFC

Chairman and CEO

Mike Masterson joined the Sammons family of companies in 1995. He held the position of Executive Vice President and Chief Marketing Officer of Midland National, becoming President and CEO in 1996. He was promoted to Chairman, CEO and President of Midland National and North American in 1999 and President and CEO of the Sammons Financial Group in January 2002. In 2003, Mike was appointed Chairman and CEO of the Sammons Financial Group.

Mike's career in the insurance business began in 1969 when he joined Connecticut General. He spent 16 years in various field positions before entering the home office in 1985, where he was primarily involved in the responsibilities of a Chief Marketing Officer and in his role as the CEO of a broker/dealer. In his current role, Mike is responsible for the operational profitability and strategic growth of Sammons'

financial services companies.

Mike earned a bachelor of arts degree from the University of Minnesota and is a graduate of the University of Minnesota Executive Program, the Harvard Executive Program in Competitive Strategies, and the LIMRA Leadership Institute. He has also earned his CLU, ChFC, and LLIF designations and has been a mem ber of various industry boards, including the LIMRA International Board from 1997 to 2000, the National Endowment for Financial Education from 1996 to 1998, and the American Council of Life Insurers (ACLI) Board in 2007.

Sammons
Core Values

Sammons Enterprises' mission is to build category-leading businesses through a commitment to the highest ethical standards, proven operational expertise, and success in creating enduring value and stability for its stakeholders.

Sammons Enterprises Core Values:

Ethics & Integrity
Tell the truth.
Honor the intent of commitments.
Do the right thing, even if unpopular or risky.
Open Communications
Share complete information with others.
Listen openly to the ideas and input of others
Coach others by giving constructive feedback.
Personal Accountability & Empowerment
Empower self and others.
Ask "what more can I do" to make a difference.
Think like an employee owner.
Meet obligations to others in a timely manner.
Focused Direction & Purpose
Live the Mission Statement.
Identify and focus on your/others Blue Chips.
Clearly communicate expectations and standards.
Make/exceed the plan.
Respect for Individual
Show appreciation for the contributions of others.
Treat others with respect, dignity and common courtesy.
Ask for and offer support freely.
Teamwork
Clarify roles and responsibilities with team members.
Share the recognition for successes with the team.
Accept responsibility equally for successes and failures.

"No price is set on the lavish summer;
June may be had by the poorest comer."
- James Russell Lowell, The Vision of Sir Launfal

FIDELITY

Fidelity Investments Life Insurance Company and Empire Fidelity Investments Life Insurance Company are IMSA’s two newest members. Congratulations!

American Fidelity Assurance Company Renews National Ethics Qualification

Posted by marin2008

Friday, 05 June 2009

Excelsior Awards and news letter.
We are knee-deep in production of our summer issue of our Excelsior newsletter for Company Presidents and other senior executive. As usual, it will be filled with lots of IMSA news and some insights on the enhancements to the IMSA qualification process for 2010. If you or your company��s President and Chief Compliance Officer are not receiving this, just let us know and we will be sure to include you when it is mailed out in early July.

As is our custom, we will be presenting our annual Excelsior Awards for best practices to companies at the ACLI Legal and Compliance Section meeting in Boston, July 22-24. We hope to see you there. Awards for excellence will be presented to these companies:
·    The John Hancock Companies
·    Midland National Life Insurance Company
·    North American Company for Life and Health
·    TIAA-CREF Life Insurance Company

As usual, we will have a booth and hope to see you there. We will be located right by the registration desk and look forward to seeing many of you there. Please stop by to say “hello.” I am especially pleased to be joined this year by Caile Currin, JD and President and CEO Currin Compliance Services, of Greenwich, NY. Caile has qualified as IMSA’s newest Independent Assessor, and I am looking forward to working with her on IMSA and other issues. Learn more about her at http://www.currincompliance.com and be sure to stop by and see us at the ACLI meeting, program shown below.

"Mine is the Month of Roses; yes, and mine
The Month of Marriages! All pleasant sights
And scents, the fragrance of the blossoming vine,
The foliage of the valleys and the heights.
Mine are the longest days, the loveliest nights;
The mower's scythe makes music to my ear;
I am the mother of all dear delights;
I am the fairest daughter of the year."
- Henry Wadsworth Longfellow

Compliance and Legal Sections Annual Meeting

July 22-24, 2009

Westin Boston Waterfront
Boston, Massachusetts

Wednesday | Thursday | Friday


	Wednesday, July 22

11:00 AM -
5:30 PM

Registration
Grand Ballroom Foyer

1:00 -
3:00 PM

General Session
Grand Ballroom B

Welcome and Opening Remarks

Chair: Compliance Section
Patricia Kibler, Compliance Leader, Genworth Financial

Chair: Legal Section
Dennis Schoff, Senior Vice President & General Counsel, Lincoln Financial Group

Regulatory Overhaul Following Financial Turmoil and a New Administration
David Nason, Managing Director, Promontory Financial

3:00 -
3:30 PM

Refreshment Break
Grand Ballroom Foyer
Sponsored by:

3:30 -
4:30 PM

Concurrent Breakout Session 1
Grand Ballroom B

STOLI: What Will Happen?

James S. Bainbridge, Associate, Drinker Biddle & Reath LLP

Stephen C. Baker, Partner, Drinker Biddle & Reath LLP

Concurrent Breakout Session 2
Grand Ballroom C

Chronologically Challenged Identifications: Senior Designations

David Leifer, Senior Counsel, American Council of Life Insurers

James Odland, Vice President & Managing Counsel, Thrivent Financial for Lutherans

Concurrent Breakout Session 3
Grand Ballroom D

Self-Critical Analysis: Legal Issues and Considerations
What is the self-critical analysis privilege, in both its common-law and statutory form? The privilege's scope, elements, and exceptions, as well as possible alternatives when it is unavailable will be covered.

Dan Himmelfarb, Partner, Mayer Brown

4:30 -
5:30 PM

Concurrent Breakout Session 4
Grand Ballroom B

The Good, the Bad and the Ugly: Market Conduct Reform
The NAIC established goals and guidance for market conduct reform in its Insurance Regulatory Modernization Action Plan in 2003. This session will review its effectiveness to date, and barriers that continue to impede meaningful reform. The Market Conduct Annual Statement (MCAS) has been a controversial component of those reforms, and there will be discussion about the status of that project.

Kelly Ireland (moderator), Counsel, Insurance Regulation, American Council of Life Insurers

Lee Wood, Vice President, External Affairs, Prudential Financial

Patricia Kibler, Compliance Leader, Genworth Financial

Concurrent Breakout Session 5
Grand Ballroom C

Replacement (ri-ˈplās-ment): Noun. The action or process of replacing
Learn how companies handle replacement trending and reporting, oversight controls, identifying unreported replacements and managing suitability oversight.

Carla Strauch, Director, Insurance Compliance, Thrivent Financial for Lutherans

Concurrent Breakout Session 6
Grand Ballroom D

Litigation Update: Recent Developments That Will Help Your Company Prevail in Litigation
From STOLI to statue of limitations, this presentation discusses some of the frequently recurring legal issues facing life insurance companies. Learn how insurers have been winning legal battles over the last twelve months. The discussion will include fraud and bad faith litigation, class actions, preemption, agent litigation, and other timely issues.

Jason Walters, Partner, Bradley Arant Boult Cummings LLP

5:30 -
7:30 PM

Reception
Grand Ballroom A
Sponsored by:

7:30 PM

Dinner on your own


	Thursday, July 23

8:00 AM -
4:30 PM

Registration
Grand Ballroom Foyer

8:00 -
9:00 AM

Continental Breakfast
Grand Ballroom A

9:00 -
10:00 AM

General Session
Grand Ballroom B

TBD

10:00 -
11:00 AM

Compliance General Session
Grand Ballroom B

Responding to the Demands of Evolving Suitability Standards
Learn how different insurers have responded to the evolving annuity suitability landscape. Understand differing approaches regarding suitability disclosure, data collection, trending and reporting, and suitability review.

Carla Strauch, Director, Insurance Compliance, Thrivent Financial for Lutherans

Michelle R. Holmes, Director, Minot Compliance, ING

Legal General Session
Grand Ballroom C

Legislative and Regulatory Update from ACLI

Kim Olson Dorgan, Senior Executive Vice President- Federal Relations and Political Affairs, American Council of Life Insurers

Bruce Ferguson, Senior Vice President, State Relations, American Council of Life Insurers

11:00 -
11:15 AM

Refreshment Break
Grand Ballroom Foyer

Sponsored by:

11:15 AM -
12:30 PM

General Session
Grand Ballroom B

That was Then, This is Now: Evolution of AML Programs in an Examination Environment
Four life insurers discuss their Anti-Money Laundering programs - how three of those have evolved prior to examination by the IRS to post-examination, and how one company is preparing in anticipation of an IRS exam.

Dave Griffin, Assistant Vice President & Compliance Officer, The Baltimore Life Companies

Ann Teixeira, Assistant Vice President, Compliance, Sun Life Financial

Laura Perlotto, Assistant Vice President, Massachusetts Mutual Life Insurance Company

Jessee Wilson, Assistant General Counsel, Compliance, Colonial Penn Life Insurance Company

12:30 -
2:00 PM

Luncheon
Grand Ballroom A

What to Expect from the Obama Administration

Tucker Carlson, Political Commentator, Fox News Channel

2:00 -
3:15 PM

Concurrent Breakout Session 1
Grand Ballroom B
Legal Framework and Risks Associated with the use of Social Networking sites such as Facebook, Twitter

Jennifer Archie, Partner, Latham & Watkins

David Carson, General Counsel, Genworth Financial

John Vaccaro, Vice President, New York Life

Concurrent Breakout Session 2
Grand Ballroom C

Principles Based Regulation and Corporate Governance: How Many Actuaries are on your Board?
The practical and legal consequences of insurance department actuaries drafting broad new corporate governance standards, including significant additional obligations for boards of directors.

Jean-Pierre Bernie, Senior Vice President & General Counsel, Canadian Life and Health Insurance Association Inc.

Paul Graham, Senior Vice President, Insurance Regulation & Chief Actuary, American Council of Life Insurers

Christopher J. Ray, Associate, Debevoise & Plimpton, LLP

3:15 -
3:30 PM

Refreshment Break
Grand Ballroom Foyer

3:30 -
4:30 PM

Concurrent Breakout Session 3
Grand Ballroom B

Monitoring: What Functions We Monitor and How?

David Griffin, Assistant Vice President & Compliance Officer, The Baltimore Life Companies

John Apostle, Senior Vice President, Chief Compliance Officer, Genworth Financial

Concurrent Breakout Session 4
Grand Ballroom C

Life & Annuities: A look at current compliance enforcement issues and relationships to regulatory trends and/or requirements
This presentation examines recent enforcement actions focused on key areas such as replacement, suitability, advertising, and underwriting. Additionally, there will be discussion on these enforcement actions' relationship to the associated compliance requirements, and trends leading some states to tighten regulatory requirements on these issues (for example Model 275 adoptions.)

Kathy Donovan, Wolters Kluwer

Concurrent Breakout Session 5
Grand Ballroom D

Framework for Strategic Legal Advocacy
Like regulators and legislatures, appellate courts have a substantial impact on life insurers. Just as industry-wide strategies are used for advocating before regulators and legislatures, industry-wide strategies should be developed for creating the best precedent for life insurers in appellate courts. This presentation will explore ways in which those strategies can be systematically implemented on a nationwide level.

Doug Alexander, Alexander Dubose & Townsend, LLP

Robert Dubose, Alexander Dubose & Townsend, LLP

5:00 -
6:00 PM

Reception
Grand Ballroom A

6:00 PM

Dinner on your own


	Friday, July 24

7:30 -
11:30 AM

Registration
Grand Ballroom Foyer

7:30 -
8:30 AM

Continental Breakfast
Grand Ballroom A

8:30 -
9:30 AM

General Session
Grand Ballroom B

Industry Resources: tips and Tricks for Understanding What's Required
How do you stay on top of insurer responsibilities in viatical settlements, restrictions on agents’ senior credentials, and other hot compliance topics? This session offers tips and tricks on how companies can make the most efficient use of their resources with the help of ACLI’s law surveys, bill and reg tracking data bases, and other services for legal compliance.

Carla Strauch, Director, Insurance Compliance, Thrivent Financial for Lutherans

Barbara Price, Vice President, Legislative & Regulatory Information, American Council of Life Insurers

9:30 -
11:30 AM

General Session
Grand Ballroom B

Ethics
Lee Augsburger, Senior Vice President & Chief Compliance Officer, Prudential Financial

Edward Clemons, Senior Vice President and Chief Human Resources Officer, Penn Mutual

Kristine K. Digirolamo, Compliance Integration Director Enterprise Ethics & Compliance, Allstate Insurance Company

Donald Walters, SVP, General Counsel & Secretary, IMSA

Antitrust Disclaimer: The American Council of Life Insurers is committed to adhering strictly to the letter and spirit of the antitrust laws. Meetings conducted under ACLI's auspices are designated solely to provide a forum for the expression of the various points of view on topics described in the agenda. Under no circumstances shall ACLI meetings be used as a means for competing companies to reach any understanding, expressed or implied, which tends to restrict competition, or in any way, to impair the ability of members to exercise independent business judgment regarding matters affecting competition.

Insurance Compliance Insight on Federal Regulation

“Federal Financial Services Overhaul Won’t Replace State Insurance Regulation” Says Insurance Compliance Insight

In a June 22 article Insurance Compliance Insight reports that Obama’s

plan calls for establishing a federal office of insurance information but “will apparently leave state-based insurance regulation in place.”

Written in consultation with executives from MetLife, Allstate, Travelers and Prudential, the plan outlines six principles for insurance regulation:

1. Effective systemic risk regulation with respect to insurance.

Strong capital standards and an appropriate match between capital allocation and liabilities for all insurance companies.
Meaningful and consistent consumer protection for insurance products and practices.
Increased national uniformity through either a federal charter or effective action by the states.
Improve and broaden the regulation of insurance companies and affiliates on a consolidated basis, including those affiliates outside of the traditional insurance business.
International coordination.

The President sees the current situation as a failure of the existing system and its complexities: “In some cases, the dealings of these institutions were so complex and opaque that few inside or outside these companies understood what was happening. Where there were gaps in the rules, regulators lacked the authority to take action. Where there were overlaps, regulators lacked accountability for their inaction.”

Industry stakeholders had diverse views on the impact of the proposed plan:

NAIC CEO Terri Vaughn: “Our initial read of the administration’s financial overhaul plan seems to reflect what is most important to us: preserving the consumer protections and financial solvency oversight of the historically strong and solid system of state-based insurance regulation.”

NAVA CEO and president Cathy Weatherford said, “We need to ensure we get effective regulation, not just more regulation. Unless it’s effective, layering on more and more bureaucracy will do more harm than good.”

ACLI CEO Frank Keating: “Moreover, the white paper recognizes that the 135-year-old state regulatory system is riddled with inefficiencies, inconsistencies and unnecessary barriers to competitiveness that have not been alleviated despite sincere efforts by state regulators and the NAIC to advance uniformity.”

See the comments of other industry leaders and stakeholder in the ICI article.

In a CNBC interview, the President said: “Speed is important. We want to do it right. We want to do it carefully. But we don’t want to tilt at windmills. We want to make sure that we’re getting the best possible regulatory framework in place so that we’re not repeating the mistakes of the past.”

The Senate, however, is not scheduled to look at the plan until the fall, says ICI.

Read the ICI article at http://www.ins-compliance.com/article.cfm?id=1308 or the full an 85-page Treasury Department white paper by clicking here. If you are not a subscriber just send an email to the editor at editor@ins-compliance.com and you will be given a 4-week free trial subscription.

The new annuity brochure from IMSA.

Annuity Consumer Guide Released Today

Posted : Mon, 01 Jun 2009 04:01:29 GMT

Author : IMSA

Category : Press Release

News Alerts by Email ( click here )

Press Release News | Home

WASHINGTON, DC -- 06/01/09 -- A new Annuities Consumer Guide, designed to help consumers understand their choices among a differing and sometimes confusing array of annuity products, was released today by the Insurance Marketplace Standards Association (IMSA). The Guide is available in both English and Spanish versions.

"This guide doesn't presume that an annuity is the best insured retirement solution for every individual, but rather gives consumers the facts they need to make an informed decision with respect to their own unique needs," said IMSA CEO Brian Atchinson.

He adds that the guide provides "Ten Safe Steps to Buying Annuities with Confidence" so that consumers know what questions to ask their agents and advisors. "IMSA-qualified companies commit to market and sell their products ethically as required by IMSA standards," said Atchinson, "so we have a sound perspective on what questions the consumer should be bringing to the table."

The Annuities Consumer Guide, developed with helpful feedback from AARP and other consumer advocates, is available in print and online at www.IMSAethics.org and on the web sites of IMSA-certified companies.

And what is so rare as a day in June?
Then, if ever, come perfect days;
James Russell Lowell

Excellent summary from IMSA on NAIC meeting.

NAIC 2009 Summer National Meeting Summary

By Donald J. Walters

The National Association of Insurance Commissioners (NAIC) met in Minneapolis, Minnesota for their 2009 Summer National Meeting from June 12-16. A summary of key events of interest to IMSA companies is set forth below:

NAIC Market Regulation and Consumer Affairs (D) Committee – Annuity Suitability Supervision and Monitoring:

Representatives of the several of the states that participated in IMSA's supervision and monitoring initiative offered a recommendation to have to the NAIC Market Conduct Examination Standards Working Group explore ways to incorporate key findings of IMSA's Annuity Suitability Supervision and Monitoring Practices Report into the NAIC Market Regulation Handbook. The Working Group will establish a Subcommittee to develop a recommendation with respect to the best way to incorporate the findings of the IMSA Report into the Handbook.

Bruce Ramge of Nebraska, Chair of the Market Conduct Examination Standards Working Group, provided a report concerning this initiative during his remarks before the NAIC Market Regulation and Consumer Affairs (D) Committee.

IMSA staff met with Commissioner Holland of Oklahoma (who serves as chair of the NAIC Market Regulation and Consumer Affairs (D) Committee) to discuss this initiative and other related issues.

NAIC Suitability of Annuity Sales (A) Working Group:

The NAIC Suitability of Annuity Sales (A) Working Group held several meetings during the course of the Summer National Meeting to continue to review the May 26 Discussion Draft of proposed revisions to the NAIC Suitability in Annuity Transactions Model Regulation. The Working Group, chaired by Kim Shaul, Deputy Commissioner of the Wisconsin Office of the Insurance Commissioner, held a four hour meeting on Friday, June 12 and a 90 minute meeting on Saturday, June 13 to review a list of issues identified by the Working Group that they reported to be representative of the comments which were submitted in advance of the Summer National Meeting. The Working Group also held a three hour, closed door session on Sunday, June 14 in which they received presentations from three life insurance companies that described their annuity suitability practices.

IMSA as well as several other organizations and individuals submitted comments suggesting that the Working Group had not identified nor gained consensus agreement on the annuity suitability marketplace issues that required revisions to the Model Regulation as outlined within the May 26 Discussion Draft. (See, IMSA comment letter attached.) IMSA's comment letter noted, among other issues, that it was likely that the process necessary to gain approval of revisions to the Model Regulation at the NAIC could take many months or years to complete.

IMSA's comment letter (developed through consultation with IMSA's Annuity Suitability Supervision and Monitoring Working Group) encouraged the NAIC Suitability of Annuity Sales (A) Working Group to consider a new approach by developing interpretive guidance to provide greater clarity with respect to the interpretation and application of key provisions of the existing Model Regulation now adopted in more than 40 states. The term "guidance" is in the Working Group's charge and it was suggested that developing interpretive guidance in this instance would allow the Working Group to provide a more immediate, short-term solution to address current annuity suitability marketplace concerns. IMSA also commented this strategy was developed in consultation with several marketplace stakeholders including state and federal regulators, consumers, producers, distributors and representatives of IMSA qualified companies who presented this strategy initially at the March IMSA-AARP Annuity Suitability Summit Meeting.

It was suggested that, by providing interpretive guidance, the Working Group could promote uniformity and consistency for regulators conducting reviews to determine compliance with the requirements of the existing Model Regulation and could clarify insurer expectations with respect to what may constitute an appropriate demonstration of compliance with these requirements as well.

Ask me no more where Jove bestows,
When June is past, the fading rose;
For in your beauty's orient deep
These flowers as in their causes, sleep.

Thomas Carew

IMSA provided testimony at the Working Group meetings to encourage members of the Workin g Group to pursue a more collaborative approach by developing interpretive guidance that would reflect the interests of all marketplace stakeholders. IMSA also provided a brief outline of key concepts upon which it is believed that consensus interpretive guidance could be developed. (See, Key Concepts document attached.)

Unfortunately, the Working Group's discussions throughout its meetings did not include any meaningful discussion of the content of the many comment letters submitted by interested parties, including other regulators, some of which suggested consideration of alternative approaches other than the proposed revisions to the existing Model Regulation as reflected in the Working Group Discussion Draft.

At its Saturday, June 13 meeting, the Working Group voted to make the May 26 Discussion Draft (with appropriate revisions discussed during the Working Group's Friday and Saturday meetings) an Exposure Draft for further review and comment during the coming weeks. Later in the day after the meeting concluded, a copy of IMSA's key concepts document was distributed by the NAIC to members of the Working Group.

IMSA staff met with Wisconsin Commissioner Sean Dilweg and his senior staff to discuss the status of these efforts and to explain IMSA members' desire for clarity, predictability and consistency in the manner in which the states and the NAIC address these issues and the relevance of companies' and consumers' concerns regarding the NAIC direction on this initiative. These perspectives were also shared with other regulators and NAIC leadership who expressed interest in continuing the dialogue.

IMSA will continue to monitor the activities of the NAIC Suitability of Annuity Sales (A) Working Group and will work with its stakeholders to develop appropriate strategies to address current annuity suitability marketplace concerns.

NAIC Life Insurance & Annuities (A) Committee

Members of the NAIC Life Insurance & Annuities (A) Committee heard a series of reports of its associated Working Groups.

IMSA was asked by the leadership of NAIC Life Insurance & Annuities (A) Committee to provide testimony concerning its recommendation to have the NAIC Suitability of Annuity Sales (A) Working Group consider the use of interpretive guidance as a means to address concerns regarding annuity suitability in the marketplace in a timely manner. (See above.)

"Who comes with Summer to this earth
And owes to June her day of birth,
With ring of Agate on her hand,
Can health, wealth, and long life command."
- June adage 1889

NAIC Annuity Disclosure (A) Working Group

The NAIC Annuity Disclosure (A) Working Group reviewed a revised draft guaranty association disclosure notice. Questions discussed concerning the timing of delivery of the disclosure notice (i.e., prior to the sale or after the sale). A conference call will be held in July to discuss the revised draft notice. The Working Group also heard a presentation by a representative of the American Academy of Actuaries of proposed revisions to sample annuity illustrations to be considered by the Working Group. The Working Group announced plans to conduct two conference calls in August concerning annuity illustrations and plans to offer recommendations concerning this issue at the Fall National Meeting.

“Reprinted with permission from The Insurance Marketplace Standards Association (IMSA).”

Marching ahead…IMSA’s fifth cycle begins in 2010

My O My how time flies! It seems like only yesterday that IMSA came into being. Now IMSA’s fourth membership cycle is winding down, and the fifth is on the horizon in 2010.

The Kenneth J. Kalis Company has prepared an article recounting some of the changes through the years but focusing on the key changes for the next cycle. The key ones are:

2009 Enhancements to the IMSA Process

Ø Mandatory Use of Topic Based Approach

Ø Mandatory Use of IMSA Templates for New Companies

Ø Consulting Role for Independent Assessors

Ø Limited offering of Streamlined Assessments for former Member Companies

Ø Optional Attestation Alternative for Membership Renewal for Qualifying Companies

Ø Updated Assessment Handbook and Manual

You can read all about these in our summer edition of Excelsior to be published next week and posted on our website shortly thereafter: www.kkalis.com.

"This is June, the month of grass and leaves . . . already the aspens are trembling again, and a new summer is offered me. I feel a little fluttered in my thoughts, as if I might be too late. Each season is but an infinitesimal point. It no sooner comes than it is gone. It has no duration. It simply gives a tone and hue to my thought. Each annual phenomena is reminiscence and prompting. Our thoughts and sentiments answer to the revolution of the seasons, as two cog-wheels fit into each other. We are conversant with only one point of contact at a time, from which we receive a prompting and impulse and instantly pass to a new season or point of contact. A year is made up of a certain series and number of sensations and thoughts which have their language in nature. Now I am ice, now I am sorrel. Each experience reduces itself to a mood of the mind."
- Henry David Thoreau, Journal, June 6, 1857

Suitability best practices from June 4 Webinar

IMSA’s June 4^th Webinar was great. There was wide participation, plenty of time to ask questions plus the convenience of taking part from wherever you are, (not to mention saving big bucks on travel). I thought the presenters from the companies were excellent:

Overview of the Annuity Suitability Review Process, Maureen Closson, Senior Vice President & CCO, AVIVA USA

Fixed Annuity Suitability Review, Mike Pietig, Director, Suitability and New Business Midland National/North American Company for Life and Health

Fixed Annuity Suitability Program, Marc Daniel, Compliance Associate, American General Life Insurance Companies

Fixed, Variable and Equity Indexed Annuity Suitability Practices, Larry Riddell, Director of Compliance, John Hancock Financial Network

It was great to be able to write down a question, send it to the presenter and moderator in real time so that they could respond appropriately without having their presentation interrupted. Lots and lots of great ideas were shared. Here are a few best practices we heard about:

Ø Heavy customer callouts on fixed annuities

Ø Refunds done on pre-issue basis

Ø No agent opt-out provisions

Ø Declined if information not received within 60 days

Ø Red, Yellow and Green flag monitoring systems

Ø Creative and useful suitability forms with many places for the customer to initial

Ø Mandatory fact finders that agents must retain.

Of course the very best thing is that each of us can take back home the practice that will help our company improve, that’s what IMSA’s commitment to continuous improvement is all about.

"In these divine pleasures permitted to me of walks in the June night under moon and stars,
I can put my life as a fact before me and stand aloof from its honor and shame." - Ralph Waldo Emerson, Journals

IMSA?
..................Ken Kalis!
352-505-0705 www.kkalis.com

Ken Kalis
352 -505-0705 office
352-215-9124 cell
Only Believe. Mark 5:36

IMSA?
..................Ken Kalis!
352-505-0705 www.kkalis.com

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Thank you all for your continuing interest in IMSA, ethical market conduct and the Kenneth J.Kalis Company.
www.kkalis.com

Hope to see some of you soon. Have a great summer! Cordially,

Ken Kalis

Only Believe. Mark 5:36