News

March Update for IMSA Friends:

Dear IMSA Friends:

A quarter of the year has nearly passed! I trust all is well with you. Our news is all upbeat and good. We are very busy and "on the road" most of the time between now and mid year. But this is a good sign that the remaining IMSA companies are renewing their membership. Please read on:

Six IMSA Companies Qualify For Renewal Membership

On March 4, IMSA announced the renewal membership of these six companies:

Allstate Financial companies including:

• Allstate Life Insurance Co., Northbrook, IL
• Allstate Life Insurance Co. of New York, Farmingville, NY
• Lincoln Benefit Life Co., Lincoln, NE

American United Life Insurance Co., Indianapolis, IN
Liberty Life Insurance Co., Greenville, SC; and
Protective Life Insurance Co., Birmingham, AL

We add our congratulations to those of Brian Atchinson and IMSA.

IMSA: What's In a Name?

When we set up our website back in the 1990's, we did a web search on IMSA. I emailed then Executive Director Paul Mason that the first hit was for the International Memorialization Supply Association! Things have gotten much better since then, and I never get any hits from the morticians on my google-news daily update. But I do get lots of hits from other IMSA's.

Among them are:

• International Mystery Shopping Alliance
• Innovative Medicines SA (South Africa)
• International Motor Sport Association
• Illinois Math and Science Academy
• International Municipal Signal Association
• Industria Metalurgica Sud Americana
• INTERNET & MULTIMEDIA SYSTEMS & APPLICATIONS (Hawaii)
• International Mathematics & Science Academy (India)
• Information Management Students Association (Berkeley, CA)
  

Please let us know if you come across any other IMSA's in your travels. Then read about an interesting possibility about a future IMSA below.

IMSA for P& C?

The March 21, 2005 Insurance Journal ­ USA reports that the CPCU Society is looking at IMSA as a model to by helping the industry restore its image after months of charges about bid rigging and contingent commissions

The article written by Andrew G. Simpson, Jr. reports that a society task force is researching whether a self-regulatory body like IMSA would be a useful model for the property casualty industry and role the Society should play in any industry image-restoration effort.

"We will look at the IMSA model," CPCU President Don Hurzeler said. "I've asked them to do some fast work before our April board meeting, such as look at an IMSA-type organization and if we are the right people to be involved."

Hurzeler went on to say the current scandal is a "wake-up call" for the industry that is "horrified" by the illegal activity recently uncovered. The P & C group obviously recognizes the value of the IMSA seal, that IMSA says is "tangible proof that a company adheres to specific, stringent market conduct principles."

We think it's great that the value of IMSA is being perceived by other organizations concerned about ethical market conduct. "Imitation is the sincerest flattery," said C.C. Colton. Let's hope the IMSA model will serve the P & C folks as well as it has our own industry.

You can read more about this in the March 21, 2005 edition of Insurance Journal East which also includes an interview with IMSA's Executive Director, Brian Atchinson.

Raising the Bar: What Next?

Part of IMSA's vision is one of continuous improvement. For this reason, substantial upgrades to the assessment process have been made with each cycle. For example, after the first cycle, the "point in time" assessment was broadened to require continuous compliance throughout the membership period. During this first cycle where companies could renew their membership, a requirement for an "ongoing system of monitoring" was mandated. Along with these stiffer requirements was some important language, including suggested contractual language, for the managing and on-going monitoring of contractual relationships where duties or responsibilities had been delegated to third parties.

In 2003, the IMSA Assessment Manual was introduced to assure consistency among assessors. This augmentation to the Assessment Handbook helped align the assessment process conceptually with the market conduct examination approach used by regulators and help member companies get recognition from regulators for IMSA membership. Now, as we end the third cycle of assessments, what lies ahead? We expect more changes in the spirit of continuous improvement and are interested in any thoughts you may have. Just drop us a line at www.kkalis.com or give us a call at 386-462-1074. We'll be sure to share your ideas with the decision makers at IMSA.

NEWS RELEASE

For Immediate Release

For Information, Contact:
March 18, 2005 Kristine Heine, 202-371-9600

IMSA'S ANNUAL COMPLIANCE BEST PRACTICES WORKSHOP TO FEATURE TOP SPEAKERS AND ROUNDTABLE DISCUSSION

WASHINGTON, DC - At a time of great concern regarding legal and ethical practices in the insurance industry, the annual Compliance Best Practices Workshop once again will be hosted by the Insurance Marketplace Standards Association (IMSA) May 11-13 at the Hyatt Regency in Chicago.

Suitability disclosure requirements, replacement monitoring, creating a culture of compliance, independent producer training and monitoring, and Sarbanes-Oxley reviews will be among the topics addressed.

The workshop agenda includes compliance professionals from a number of major insurance companies who will speak, including James J. Buddle from Genworth Financial, Inc.; ING U.S. Financial Services¹ Carol Stern; and Deanna Osmonson of AIG-American General. Other speakers include Bankers Fidelity Insurance Company President Eugene Choate and presenters from NASD, NAIC and LIMRA.

In its fifth year, this unique workshop allows insurance compliance professionals to gather in a roundtable setting to discuss areas of concern and to share best practices that can be applied to meet compliance challenges. Participants have the opportunity to exchange ideas about managing, developing and implementing their own compliance best business practices.

"The informal tone of the workshop encourages open conversation and gives everyone the chance to learn by sharing ideas for maintaining ethical standards and solving complex compliance issues in the life insurance, long-term care insurance and annuity industries today," IMSA Executive Director Brian Atchinson said.

The list of speakers also includes:

• AEGON Compliance Communications/IMSA Coordinator Diana Hallberg
• NAIC Market Regulation Division Director Timothy Mullen;
• Joel Ario, Oregon Insurance Administrator, NAIC Vice President and Vice Chair of NAIC Market Regulation Committee.
• Andy Favret of the NASD
• John Hancock Life Insurance Company Senior Learning and Compliance Specialist, John Papas
• Baltimore Life Insurance Company Assistant Vice President Customer Relations & Compliance, David P. Griffin
• Thrivent Financial for Lutherans Senior Quality Business Analysts Sharon Belongea and Karin Vukich;
• LIMRA Assistant Vice President Compliance Services Tom Caraher
• Qualified Independent Assessors Dennis M. Groner, Principal, Groner & Associates; Attorney Katherine Doughty Phillips, Doughty Consulting; Attorney Faith M. Williams, Bricker & Eckler, L.L.P.; Attorney Gary C. Harriger, Funk & Bolton P.A.; Kenneth J. Kalis, President, The Kenneth J. Kalis Company, Inc.; and Thomas W. Stallings, President, Professional Market Practices, Inc.; Margaret C. Spencer, Managing Director, and Jann Goodpaster, American Express Tax & Business Services, Inc.; and,
• Raising Standards Association of British Insurers Director Martin Shaw.

To register or obtain more information, visit the IMSA Web site, www.IMSAethics.org., call Margie Lopez at 240-497-2907, or email Ms. Lopez at MargieLopez@IMSAethics.org.

Past Updates

• News
• August 2005
• July 2005
• June 2005
• May 2005
• April 2005
• March 2005
• February 2005
• January 2005
• December 2004
• November 2004
• October 2004
• September 2004

IMSA Links

• imsaethics.org
  
• LOMA

Kalis Company to Sponsor IMSA Best Practices Workshop

We are pleased to again be sponsors this year of the IMSA Best Practices Workshop. Please be sure to say hello during the break on Thursday morning.

And now, before this month's non-IMSA close, a thoughtful reader's response to last month¹s end piece on whether computers are male or female:

The women may have won but, in this case, they are wrong.

The Spanish word for
computer is la computadora - a feminine noun.

Many thanks to Mike Shovein at American Express for pointing this out.

Now for this month's close. With "Tax Day" rapidly approaching, we thought you might be interested in this piece sent in by a friend. It was written by T. Davies, Professor of Accounting at the University of SD School of Business.

Let's put taxes in terms everyone can understand.

Suppose that every day, ten men go out to dinner. The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men - the poorest - would pay nothing, the fifth would pay $1, the sixth would pay $3, the seventh $7, the eighth $12, the ninth $18, and the tenth - the richest - would pay $59.

That's what they decided to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement until one day, the owner threw them a curve (in tax language, a tax cut). "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20."

So now the dinner for the ten men only costs $80. The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still eat for free. But what about the other six, the paying customers? How could they divvy up the $20 windfall so that everyone would get his "fair share?"

The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would end up being PAID to eat their meal. So they decided to reduce each man's bill by roughly the same amount (as they had been paying their taxes) and proceeded to work out how much each should pay.

And so the fifth man now paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of his earlier $59. Each of the six was better off than before. And the first four continued to eat for free.

But once outside the restaurant, the men began to compare savings. "I only got $1 out of the $20" declared the sixth man, pointing to the tenth. "But he got $7." "Yeah, that's right", exclaimed the fifth man. "I only saved $1 too. "It's unfair that he got seven times more than me."

"That's true," shouted the seventh man, "why should he get $7 back when I only got $2? The wealthy get all the breaks." "Wait a minute," yelled the first four men in unison, "We didn't get anything at all. The system exploits the poor." The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for dinner (or, in the real world, he took his business out of the country), so the nine sat down and ate without him. But when it came time to pay the bill, they discovered, a little late, what was very important. They were $52 short of paying the bill.

Imagine that? And that is how the tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being too wealthy, and they just may not show up at the table anymore.

We hope your math adds up on tax day and thank you for your continuing interest in IMSA, ethical market conduct and the Kenneth J. Kalis Company.

Ken Kalis

Only believe.
Mark 5:36

Telephone: 386-462-1074
Fax: 386-462-1075
Email: kkalis@kkalis.com
17220 NW 78th Avenue,
Alachua, FL 32615.