Examples of Regulatory Incompetence
Late-Night Comedians Be Warned, Some Insurance Regulators Are Speaking
The attached document was presented at a May 1, 1994 NAIC meeting attended by approximately 100 industry executives and regulators on the NAIC’s on-going work to improve life insurance policy illustrations. While the full NAIC document is a virtual goldmine of life insurance regulatory incompetence, the following sections contain some extra-special treasured nuggets:
Section 4 Paragraph F which reads: “Rate of Return means the ratio of interest credited to premium paid.” [They really prepared a document that stated that, I’m not making this stuff up. Consequently,] Appendix A (the last page of this document) shows that in the years in which the “interest credited” was reported as $85, $120 and $170 on a policy with a $1000 annual premium, that the NAIC was proposing that the Rate of Return for those years, respectively, be listed as 8.5%, 12% and 17%. Let me know when you stop laughing.