FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

ICAE Fall 2000 Exchange ICAE Fall 2000 Exchange

Ten Questions That Ten Questions That Keep Me Up at Keep Me Up at

NightNight…..…..Steve Toretto, Vice President, Insurance Counsel

Pacific Life Insurance Company

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

What’s in those

Files???!!!!

(Toretto’s Mantra: Document, document,

document!!!)

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

Have all sales materials been reviewed by the Compliance Dept. and the Broker-Dealer?

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

WHAT IS SALES WHAT IS SALES MATERIAL?MATERIAL?Material that is designed to create

public interest in:

– life insurance or annuities,

– an insurer,

– an insurance producerOR……...

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

material designed to induce the public to:– purchase,– increase,– modify,– reinstate,– borrow on,– surrender,– replace or– retain a policy.

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

EXAMPLES OF SALES EXAMPLES OF SALES MATERIAL MATERIAL INCLUDE……...INCLUDE……... Brochures Flyers Newsletters Letters to Potential

Customers Newspaper Ads Magazine Ads Directory Ads

Performance Reports or Summaries

Customized Illustrations

Generic Concept Materials

Proposals Websites

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

Do sales materials distinguish

the features of the sales concept from the “life

insurance” features of the product?

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

Is anyone watching out for

Fraud...

And

Other White Collar Crimes?

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

Is the NASD interested in

state insurance laws, and are insurance regulators

interested in the NASD Rules???

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

Has coverage been replaced only when in the best interest

of the policyowner (See Toretto’s Mantra)?

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

•79 Year Old Woman

•Has 4 Pretty Much Paid Up Life Insurance Policies

•Replace with Variable Life Insurance

•Allocated Totally to an International Account

•Good Replacement?

REPLACEMENTS CASE STUDYREPLACEMENTS CASE STUDYREPLACEMENTS CASE STUDYREPLACEMENTS CASE STUDY

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

•What are the guaranteed and the non-guaranteed elements of the existing and the proposed policies?

•How will the surrender charges – both those that may be assessed on the surrender of the existing policy and those applicable to the proposed policy – affect policy values?

•How do new incontestability and suicide provisions potentially impact the client’s protection?

REPLACEMENTS CASE STUDYREPLACEMENTS CASE STUDY

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

•Will changes in the insured’s health adversely impact mortality costs?

•How will mortality costs for the proposed policy increase due to the insured’s increased age?

•What are the differences between the existing and proposed policies’ contractual provisions, loan interest rates, and/or tax treatment?

REPLACEMENTS CASE STUDYREPLACEMENTS CASE STUDYREPLACEMENTS CASE STUDYREPLACEMENTS CASE STUDY

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

•What costs are associated with issuing a new policy, including new sales loads and other start-up expenses? How will these affect policy values?

•What goals does your client want to achieve that the existing policy cannot provide? Can the existing policy be modified to meet his or her objectives?

REPLACEMENTS CASE STUDYREPLACEMENTS CASE STUDYREPLACEMENTS CASE STUDYREPLACEMENTS CASE STUDY

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

Did someone ask about In Force Policy and Concept

Management?

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

Are applications completed in the presence of the applicant?

And hope nothing is added after the application is signed!

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

What exactly isSUITABILITY???

FOR TRAINING PURPOSES ONLY. NOT FOR USE WITH THE PUBLIC.

Do they still think after all this

that compliance is the enemy????