National Underwriter - July 11 2011

specify competitive performance, ROR
is always a primary and critical factor.
This is especially true when the particu-
lar ROR is guaranteed as the absolute
minimum that one could receive, as it
is/was in this case. Furthermore, this
type of annuity is typically marketed with
additionally components that offer pos-
sibly even more attractive performance,
that is, potentially even larger RORs and
annual payouts.

Incredibly, when not waxing irrelevantly, NAFA’s rebuttal proceeds to incorrectly assert that I state “insurers are held to very strict advertising laws,” when the article makes no such statement. In fact, in the article I twice use obvious innuendo to disparage industry compliance practices. Elsewhere (i.e., my web site), I state views exactly opposite your misquote; that is, that enforcement is terribly ineffective and misguided, and cite other authorities who agree with me. Yet somehow NAFA tries to use its misquote and its related rambling about what it believes are the industry’s strict compliance and regulations to dodge the articles’ vital public policy questions. However, despite NAFA’s apparent resentment of these questions, they all are legitimate questions which naturally arise when this annuity and its marketing are understood. Since in court, replies like NAFA’s are called non-responsive, let me briefly rephrase a few questions. 1) Given the undeniable importance of ROR, how is it that these annuities are marketed without sample RORs like that shown in my article? 2) Moreover, given that regulations are supposed to prohibit sales literature/presen-tations that have the capacity or tendency to mislead or deceive, how is it that these annuities are marketed without accompanying literature that highlights the readily erroneous misrepresentations and/or misconceptions that can arise regarding this annuity’s ROR? And 3) Would NAFA like to work together with me to sample 100 consumers who have purchased this type of annuity to see what they do and don’t understand about its ROR?

There is much more in your rebuttal
that warrants a correcting response, but
I will instead close briefly with the fol-
continued from page 8s p i d T c l e m i t i a sibly even more attractive performance, that is, potentially even larger RORs and Incredibly, when not waxing irrel- evantly, NAFA’s rebuttal proceeds to in- correctly assert that I state “insurers are held to very strict advertising laws,” when the article makes no such statement. In fact, in the article I twice use obvious innuendo to disparage industry compli-

lowing two observations. One: If NAFA on its own cannot recognize this very problematic situation where an annuity is described and touted as compounding money at 8% for umpteen years, after paying a 10% bonus, and yet quite possibly is unlikely to provide consumers even a 5.5% return, and consumers are unaware or misinformed about such, then it would seem the courts will have to help NAFA finds its way. Two: While I can well understand that NAFA does not like my article’s message, such feelings do not undermine the message’s validity or importance. I invite you, Ms. O’Brien, and your NAFA members, to re-read and study my article, and then to contact me so that we together can set about correcting the problems. After all, our industry will never achieve its potential, and agents/planners will never be respected like doctors, until our industry adopts appropriate disclosure and actively repudiates and remedies problematic practices. I look forward to your reply and our future conversations.

R. Brian Fechtel Breadwinners’ Insurance

Correction
; AXA EQUITABLE has never been
deemed insolvent nor taken under state
supervision. A sidebar (“Too Good to
be True,”) to Brian’s Fechtel’s aforemen-
tioned feature incorrectly stated that the
company had failed twice in the 20th Cen-
tury.

; ON THE ONSET of the latest round of debate on healthcare reform, we were told – despite the wishes of the majority of Americans (as reflected in numerous polls) – that the “public option” was “off the table”.

An editorial in the June 18 British Med-
ical Journal looked at a widely acclaimed
study of health outcomes in major devel-
oped countries. That study showed that
our country “produced the worst score”
The author reported credible data
showing that we Americans achieve
worse health outcomes not only when
matched against developed nations…but
also as compared to impoverished coun-
tries like Cuba.

We accomplish this despite an annual per capita healthcare outlay ($7,410 – 2009 data) more than double that of the United Kingdom ($3,285) and 10 times higher than in Cuba ($707).

This editorial was written to caution the Conservative regime in the UK against emulating a “U.S. style corporate dominated system”. The point was emphatically made.

Until we address this obviously unac-
ceptable differential between spending
versus results, it is premature to dismiss
any option as arbitrarily “off the table.”
If not, why do our elected representa-
tives – putatively accountable for serv-
ing the best interests of their constituents
– continue haggling over variations of a
failed approach?

No doubt the mythology fabricated
about the “unacceptable” performance
of national healthcare programs is at the
core of this transgression.

As a former resident of Canada whose daughter lived five years in the UK, I see how this spin-doctored mythology is manipulated to bamboozle Americans into thinking that a public system would not meet their needs.