Detecting Illustration/Policy Performance Abuses

Katt, Peter C.
February 1996
Journal of Financial Planning;Feb1996, Vol. 9 Issue 1, p18
Academic Journal
Life insurance's compensation system features high first-year commissions, permanent life insurance being priced-to-the-market, many companies' and agents' apparent disinterest and inability to properly monitor and manage Life insurance policies they have sold, complicated planning issues and policy pricing analysis that are beyond the reach of many selling-oriented agents, a Wild West approach to policy performance promises, and few effective disclosure requirements. All of these combine to create one of the most fertile litigation areas currently available to plaintiff attorneys. Over the next several years, the results of the many claimed illustration abuse cases should establish new standards of care for agents and companies. This litigation solution to the horrendous behavior of some agents and companies regarding life insurance illustrations is a welcome relief from the failed attempts at regulatory solutions, which in the past have been more a facade than reality.


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