Last week, I was pleased to appear as a guest of Bob Brook’s on “The Prudent Money Show”. This show can be accessed through the Prudent Money web site - click here to go directly to the interview http://www.prudentmoney.com/podcast/112409-PrudentMoney.mp3

Let me know what you think. If you are looking for a speaker or guest for your media show, please contact me through www.tonysteuer.com

Best,

Tony Steuer, Life Insurance Consultant, Author: Questions and Answers on Life Insurance

Tags: Life Insurance, Life Insurance Consultant, Life Insurance Consulting, Questions and Answers on Life Insurance, Tony Steuer, Anthony Steuer

The following is a news release from Conning Research that discusses the continuing impact of the economy on the Life Insurance Industry:

HARTFORD, Conn., Dec. 1 /PRNewswire/ -- The life insurance industry is still working through capital losses and capital constraints resulting from the 2008 financial crisis with some success, according to a new study by Conning Research and Consulting.

"We project net after-tax statutory income of $16 billion for 2009--less than half the pre-crisis figure of 2007--despite capital losses of $20 billion in the year," said Terence Martin, analyst at Conning Research & Consulting. "Even with a $16 billion capital infusion in 2009, the industry is still well below pre-crisis 2007 levels, and capital leverage ratios have risen dramatically. The industry will continue to face capital constraints in the short term, even as capital losses abate."
The Conning Research study, "Life-Annuity Forecast & Analysis 2009-2011," reviews and projects performance for the U.S. life-annuity industry and its key lines of business.

"Underpinning our 2009 forecast is a substantial partial release of the large reserves the industry set up in 2008 for individual annuity minimum guarantees," said Stephan Christiansen, director of research at Conning. "Annuities have been the volatile segment for the industry, generating a $4 billion loss for the combined 2008-2009 period, compared to a $12 billion gain in 2007 alone. Life insurance products, on the other hand, have been remarkably stable during the crisis, and this year will generate over $8 billion of net operating gain-in line with prior years."

"Life-Annuity Forecast & Analysis 2009-2011" is available for purchase from Conning Research & Consulting by calling (888) 707-1177 or by visiting the company's web site at www.conningresearch.com.

About Conning Research & Consulting
Conning Research & Consulting provides insurance industry analysis to insurers and industry stakeholders. Its published research includes market coverage of 30 segments of the industry in addition to industry forecasting and identification and analysis of major strategic issues. As a result of its wealth of experience and intimate knowledge of the insurance industry, Conning understands industry challenges and opportunities and provides in-depth analyses on a wide range of industry products and issues. The Conning name has represented excellence in independent insurance industry research for 50 years. Conning Research & Consulting is a division of Conning, a provider of asset management and insurance industry research and consulting services to insurers. Conning is headquartered in Hartford, CT.

- Anthony Steuer, Life Insurance Consultant, Author: Questions & Answers on Life Insurance, www.tonysteuer.com

In the ongoing Wild Wild West world of the Life Settlement Industry, Governor Arnold Schwarzenegger (California) recently signed Senate Bill 98, which imposes new limitations on stranger-originated life insurance (STOLI). The following is a summary of provisions of the new law:

• Policy owners cannot enter into a life settlement for two years after a policy is issued.
• Trusts and special purpose entities (in which one or more beneficiaries of these trusts or special purpose entities do not have an insurable interest in the life of the insured) violate the insurable interest laws and the prohibition against wagering on life.
• A person cannot broker or solicit life settlements without a license issued by the insurance commissioner.
• The law contains provisions relating to the confidentiality of the insured’s medical and financial information and the annual statements of life settlement licensees.
• With certain exceptions, the law does not apply to any life settlement contract entered into on or before July 1, 2010.
• An insurer cannot restrict the lawful transfer of ownership, change of beneficiary, or assignment of a policy.

For more information, visit www.leginfo.ca.gov/pub/09-10/bill/sen/sb_0051-0100/sb_98_bill_20091011_chaptered.html

- Anthony Steuer, Life Insurance Consultant, Author: Questions & Answers on Life Insurance, www.tonysteuer.com

Prudential Research Shows Consumers Less Confident With Other Financial Vehicles

NEWARK, N.J.--(BUSINESS WIRE)--Americans believe life insurance can help bridge the gaps for loved ones created by losses in their financial portfolio, according to a report, Renewed Relevancy of Life Insurance in Stormy Economic Times issued by Prudential Financial, Inc.(Prudential), (NYSE: PRU)

The study found two-thirds of consumers believe market conditions reinforce the need to have adequate life insurance coverage. In spite of this, just 24% have reviewed their coverage and even fewer have made changes, according to Prudential’s research.

“The market collapse last year led all of us to reassess our needs, and cut down on spending,” said Mark Hug, chief marketing officer of Prudential’s Individual Life Insurance business. “People know life insurance can fill needs broader than just providing a death benefit.”

Additional findings show:

•Americans consider traditional life insurance protection as an essential safety net, with two-thirds saying they view it as one of the safer financial products available today*;

•Compared with 18 months ago, about half of those interviewed feel less confident financial vehicles such as stocks and bonds or the home equity they may have built up will meet retirement goals, outpace inflation or provide a comfortable nest egg; and

•Confidence in life insurance has remained relatively unscathed, with 78% equally or more confident their life insurance death benefit will be there to protect their loved ones.

“Unemployment concerns are also having an impact,” Hug noted. Two-thirds of those surveyed realized they need individual coverage in addition to that provided by an employer. Yet 55% have twice their annual income or less aside from coverage they get at work, the survey showed.

Prudential’s Renewed Relevancy of Life Insurance in Stormy Economic Times is part of the Taking a Pulse of American's Changing Life Insurance Needs that was fielded via the Internet between June 24 and July 1, 2009. The survey was conducted for Prudential by MRops, a Pennsylvania based, independent, market research firm. For more information, download a copy of Renewed Relevancy of Life Insurance in Stormy Economic Times. http://www.news.prudential.com

It appears that some of the life insurance industry is starting to stabilize. The following are some financial data from life insurance companies for the 2nd quarter:

• The total net gain from operations at the biggest U.S. life insurers rose to $36 billion in second quarter 2009, up 31% from the total for second quarter 2008.
• Net premiums dropped 6.5%, partly because of an 8.4% decrease in group insurance premiums.

Source: Financial data from the top 100 life insurers compiled by Highline Data Performance Monitor, a unit of Summit Business Media L.L.C., Erlanger, Ky.,the company that owns National Underwriter Life & Health.

In a report released this month, Standard & Poor’s Ratings services has released a report “Outlook Remains Negative for Most North American Insurance Sectors,” was written by a team led by primary credit analysts Kevin Ahern and Neil Stein. The report states that although the economy appears to be brightening, the insurance sector in North America will remain on a negative outlook, according to a report from Standard and Poor’s Ratings Services.

Downgrades will continue to outnumber upgrades for the next six months to a year, the ratings agency said in a report today. The life insurance industry in the United States will maintain its negative outlook. The cost of capital has slowed growth at many life insurers, while downward markets have battered their investment portfolios and earnings.

Nevertheless, the sector has its strengths, according to the report. Most insurers have the capital necessary to support their ratings levels and can meet obligations.

S&P expects that downgrades in the U.S. life insurance sector will be limited to one to two notches, but it noted that a slide in the economy that goes beyond the agency’s assumptions could eat away at insurers’ credit quality and possibly reduce ratings even more.

Still the key threat for the sector is the doubt that it may have problems raising enough reasonably priced capital and maintaining ratings if a $30 billion insured loss came up next year, S&P noted.

CHICAGO & LONDON--(BUSINESS WIRE)--The factors contributing to Fitch Ratings' Negative Outlook for the global insurance industry are unlikely to improve enough in the near term to allow for a revision to a Stable Outlook. In a report published today, Fitch describes the signs it will look for to signal an Outlook improvement including the strength of the economic recovery, improved capital access and financial flexibility and greater certainty regarding investment valuations.

Throughout 2008, Fitch moved its Rating Outlooks for all segments and regions of the global insurance industry to Negative. Continued mounting instabilities in the economic and operating environments have led Fitch to downgrade over 40% of its rated insurance groups since fourth-quarter of last year. Additionally, more than 60% of Fitch's rated insurance entities either have a Negative Outlook or on Rating Watch Negative.

Investors and other market participants have increasingly asked when Fitch may revise Outlooks on insurance company ratings to Stable. In response, Fitch's report highlights the broad framework under which market conditions and other factors would be used to make a determination for any changes.

From a macroeconomic perspective, Fitch believes that the immediate economic crisis has passed with some signs of stabilization in the market. However, Fitch also notes that continued uncertainties make it unlikely that Fitch's Negative Outlook on the sector would change before the end of 2009 or even into 2010. Fitch notes also that some additional ratings on individual insurers would need to be downgraded before stabilization is appropriate.

Fitch envisions a stabilization of ratings after all or most of the following are present:

--The economy and capital markets recover to the point that future losses implied by Fitch's Severe Stress, or by current unrealized losses, can be materially reduced within our range of possible forecasted outcomes;

--Any lags in asset write downs (or liabilities recognition) have been made, or can be reasonably predicted to be at manageable levels;

--Insurance companies more broadly gain renewed access to sufficient new, affordable capital, and;

--Any insurance-specific concerns contributing to a Negative Outlook abate, or do not materialize.

Fitch notes the timing for the stabilization of ratings will likely differ by insurance segment and geographic region.

'Insurance Industry Rating Outlooks: Global Update' is available at 'www.fitchratings.com' under the following headers:

Sectors >> Insurance >> Research

The report also provides additional analysis on each element of the framework Fitch has outlined for potential outlook revisions. www.fitchratings.com

On July 10, 2009, I was pleased to be appointed to the California Department of Insurance Curriculum Board by the California Insurance Commissioner - Steve Poizner.

Curriculum Board (from the California Department of Insurance Website):

Pursuant to C.I.C §1749.1, the board oversees the development of prelicensing and continuing education curriculum for agents and brokers, including a list of preapproved courses of study and courses of study for professional designations. The board also develops standards for providers and instructors of prelicensing and continuing education courses, programs and seminars. The Commissioner appoints board members which consist of representatives of insurance agents, brokers, and life agents trade associations and representatives of insurance companies and consumer groups. Members serve three year terms and are reimbursed for expenses related to attendance at meetings. The board meets quarterly.

This will allow me to serve the citizens of California in improving licensing and education protocols for insurance agents.

Questions and Answers on Life Insurance was recently featured and reviewed in the “It’s a Woman’s World” blog:

Questions and Answers on Life Insurance: The Life Insurance Toolbook
by Anthony Steuer, CLU
I chose to share this book with It's a woman's world readers because it covers a topic that many of us have questions about and something we need to know about. Written by a life insurance guru, this 464-page comprehensive guide to life insurance answers every question you've ever wanted to know.

Since this book isn't one you may sit down and read from cover to cover, I took the liberty of getting some information directly from the author:

"Probably the biggest issue for consumers & advisers is choosing the right type of insurance," Steuer explained. "A lot of people end up with insurance that's more than they need. Example, a whole life policy with a premium that's five to 10 times what they could pay for a term insurance policy that would better fit their needs. Another timely point is choosing a company - some of the companies have had a rough time through this economic downturn."

For individuals who are 40 years or older with children and no life insurance, Steuer offered this advice: "They still need it and shouldn't put if off. If they do their homework and stick with term life, which is what most people need, it's not that expensive. A good step would, of course, be to buy my book." This statement, which was shared via email, was followed by LOL. (See, even insurance gurus have a sense of humor.)

You can get all your other questions answered by picking up a copy of this user-friendly guide today. In addition to Steuer's book, you can find additional on his site TonySteuer.com or check out Insurance Information Institute site at III.org. Final advice? Always do your homework

Visit the “It’s a Woman’s World Blog” by Petula at http://www.petulaw.com/

Life Insurance Companies are continuing to increase premiums on their term life insurance products as well as making changes to cash value/permanent life insurance products with long term guarantees (increasing premiums). Also some companies are eliminating 20 and 30 year guaranteed level premium term life insurance products completely.

In a press release dated August 17, 2009 - Towers Perrindetails a recent study regarding the effect’s of the economy on insurer’s financial performance.

STAMFORD, CT, August 17, 2009 — The sluggish economy is negatively impacting insurers' financial performance and altering their investment and product strategies — particularly around asset/liability management (ALM) and hedging for variable annuities (VA) — according to data from the latest Towers Perrin survey, ALM and Hedging in Light of the Economic Crisis.

A vast majority (70%) of North America life insurance company chief financial officers (CFOs) surveyed indicated that depressed market values on fixed-income securities will adversely impact their company’s financial performance over the next 12 to 24 months, and more than 20% reported that the impact will be significant. The two areas that CFOs see as most affected by the financial climate are capital and surplus (80%) and their company's balance sheet (76%)

CFOs further asserted that the economic crisis has significantly impacted their firms' investment and product strategies. Nearly 60% of respondents have increased their analysis of risky asset classes while reducing their asset purchases to hold more cash. Additionally, 41% of the firms have eliminated riskier asset classes from their portfolios.

Read the entire press release on the Towers Perrin Website - Click Here

According to the latest Life Expectancy Figures as published by the Centers for Disease Control (CD) today-- Life expectancy continues its upward trend in the U.S., notching up by about two-and-a-half months in 2007 over 2006.

Over the last ten years, babies have a life expectancy that's 1.4 years greater than babies born in 1997.

Here are the latest life expectancy figures, as published by the CDC today, based on preliminary data from 2007:

*Overall life expectancy for babies born in 2007: 77.9 years (up from 77.7 years in 2006)

* Life expectancy for white females born in 2007: 80.7 years (up from 80.6 years in 2006)

* Life expectancy for white males born in 2007: 75.8 years (up from 75.7 years in 2006)

* Life expectancy for black females born in 2007: 77 years (up from 76.5 years in 2006)

* Life expectancy for black males born in 2007: 70.2 years (up from 69.7 years in 2006)

Visit the CDC Website by clicking here at www.cdc.gov

Fitch Rating Service has released their Mid-Year Update on the U.S. Life Insurance Sector which can be found at:

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=459906

According to Fitch’s summary:

Fitch's rating outlook on the U.S. life insurance sector remains negative based on concerns over the impact on capital levels, earnings and liquidity from significant deterioration in the credit and equity markets in 2008, as well as concerns regarding equity market exposures from variable annuity business.  The report recaps recent largely negative rating actions, and factors that will impact rating decisions in the near term.

It looks like things will remain rocky in the near term - though long term, it’s my personal opinion that the industry will be fine and that the majority of life insurance companies remain solid. More information on this can be found on my site on the life insurance rating services page.

A.M. Best has released the following list of Life/Health Insurers Rated A or Higher for 75 Years:

Company Name, Year Initially Rated, Current Rating:

• Aviva Life and Annuity Co., 1929, A
• Beneficial Life Ins. Co., 1929, A
• Country Life Ins. Co., 1933, A+
• Genworth Life and Annuity Ins., 1928, A
• John Hancock Life Insurance, 1928, A++
• Metropolitan Life Ins. Co. , 1928, A+
• Nationwide Life Ins Co. of Amer., 1928, A
• New York Life Ins. Co., 1928, A++
• Northwestern Mutual Life Ins., 1928, A++
• Penn Mutual Life Ins. Co., 1928, A+
• Principal Life Insurance Co., 1928, A+
• Prudential Ins. Co. of America, 1928, A+
• Standard Insurance Co., 1928, A
• Western and Southern Life Ins., 1928, A++

Source: A.M. Best Data. Ratings as of May 18, 2009

The following is a special report from Fitch Rating Services

Copyright:
Business Wire
Source:
Business Wire

NEW YORK--(BUSINESS WIRE)-- U.S. life insurers have experienced a significant deterioration in investment results in 2008, negatively affecting industry earnings and capital, as discussed in a Fitch Ratings report.
Statutory capital levels were volatile in 2008 for life insurers compared with expectations and prior years' experience. For the 25 largest U.S. life insurance groups, the average decline in reported statutory capital was 13% in 2008. However, changes ranged from an increase of 11% to a decline of 52% for individual groups. This compares with an average annual increase of 6% over the previous five years and just a 1% decline during the last market and economic downturn of 2001 and 2002.
In the report, Fitch reviews statutory capital and risk-based capital ratio changes experienced in 2008 for the largest 25 U.S. life insurance groups, which represent over 80% of industry admitted assets. Statistical tables detail the components of statutory capital changes. Capital quality is also analyzed as the benefit of domicile state permitted/prescribed accounting practices are quantified.
In addition, capital contributions are assessed to understand the capital profile excluding recent management actions.
To access this Special Report, 'Analyzing Changes in Statutory Capital for U.S. Life Insurers', please visit the Fitch Ratings web site at 'www.fitchratings.com' under Insurance > Special Reports.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 'www.fitchratings.com'. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

Fitch Ratings Julie A. Burke, CPA, CFA, +1-312-368-3158 (Chicago) Douglas L. Meyer, CFA, +1-312-368-2061 (Chicago) Brian Bertsch, +1-212-908-0549 (Media Relations, New York) brian.bertsch@fitchratings.com
Source: Fitch Ratings

For the first time in a long time, life insurance companies are increasing their term insurance premiums. This includes the majority, if not all, of the major term companies. Other changes include some companies no longer issuing 30 year+ level premium guaranteed term policies.