American Society of CLU & ChFC unveils new tool to curb replacement abuses.
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See : Servant unveiled a new tool to help life insurance and financial planning Financial planning
Evaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future performance against professionals determine when and if replacement of an existing life insurance policy is in the best interests of their clients.
The American Society's Replacement Questionnaire or "RQ" is a series of questions that uncover important information that will help agents identify, and evaluate the key issues involved in determining whether a particular policy should be replaced.
Policy replacement, the practice of discontinuing or exchanging in-force policies to purchase new ones, is one of the most widespread market conduct issues facing the insurance and financial services The examples and perspective in this article or section may not represent a worldwide view of the subject.
Please [ improve this article] or discuss the issue on the talk page. industry. Investigations and inquiries of the practice are under way in several states.
"While policy replacement is generally not in the consumer's best interest," said American Society President Millard J. Grauer, CLU, ChFC, "there are certain circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact.
2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or involving clients or issuing companies where it may be appropriate and even advantageous for a particular client to consider.
"The RQ is designed to identify those circumstances and to guide life insurance and financial professionals through the regulatory, tax, and legal issues that must be weighed before a recommendation to replace is made."
Grauer said the RQ was developed as part of the American Society's role as the insurance industry's advocate for education and ethical practices. It will be formally introduced to the American Society's members at the organization's national conference in Atlanta on Oct. 16.
While specifically designed for use by life insurance and financial services professionals, the RQ also benefits consumers by outlining the issues that should be considered and reviewed by a life insurance agent before a policy is replaced.
"The watchword for consumers is caution," said Grauer. "While there are circumstances where replacement may be warranted, consumers need to ask questions of their agent."
The RQ is the second in a series of practical educational tools introduced by the American Society to help Chartered Life Underwriters and Chartered Financial Consultants understand and deal with major issues in the area of sales practices and market conduct.
In 1993, the American Society developed the Illustration Questionnaire or IQ, which assists agents in understanding the assumptions that underlie the nonguaranteed elements found in life insurance policy illustrations. The RQ includes a section on IQ disclosures that are used to evaluate the assumptions underlying the two policies under review.
The American Society of CLU & ChFC is a national association of 36,000 insurance and financial services professionals who have earned the professional designations Chartered Life Underwriter underwriter n. a company or person which/who underwrites an insurance policy, issue of corporate securities, business, or project. (See: underwrite)
UNDERWRITER, insurances. One who signs a policy of insurance, by which he becomes an insurer. (CLU) and Chartered Financial Consultant(ChFC).
Information and single copies of the RQ and IQ can be obtained from the American Society by calling 800/392-6900.
CONTACT: Gillespie PR, Lawrenceville, N.J.
Christine Weirsky, 609/895-0200
American Society of CLU & ChFC, Bryn Mawr
Phyllis Bonfield, 610/526-2508