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Comment.

CNA Supports Judiciary

The views expressed in David C. Westerholm's June 2001 Comment ("Wimps,Whiners and Crybabies," page 8) are not shared by CNA. To the contrary, CNA has the utmost respect for the judicial system and appreciates the significant sacrifice made by citizens who serve as jurors and by judges who dedicate themselves to public service.

The right of our policyholders and all persons to be heard and treated fairly is the bedrock of our society and could not exist without both the plaintiffs' and defense bars. CNA supports targeted tort reform, recognizing that all systems have shortcomings and need to evolve over time. While we might not always agree with the verdicts rendered by judges or jurors, we understand the difficult job faced by all involved in reaching a just result. Our democracy is founded on our judicial system, and CNA supports and depends on it as an integral part of our business.

Thomas P. Stillman

Group Vice President & Deputy

General Counsel, law Department

Corporate Litigation Division

CNA Insurance Cos.

A Most Disturbing Tone

In response to the article, "Compensation Conundrum," by Anthony Steuer and Barry yokes (August 2001, page 101), let me say that that article has a most disturbing tone to it. It is typical of the "let's let the regulators or the government solve this problem." Here we have what amounts to a solution to a non-problem. I haven't heard much negative comment from the sales professionals in our business. Where is the cry for more regulation of compensation? If I have a problem with my commission contract with any of the carriers I represent as an independent life broker, I know exactly how to fix it. And it does not involve any suggestions or rules from state insurance regulators. The companies would cut me off in a minute if they could figure a way to market the product without the middleman. But they can't. It won't sell more than a small percentage over the Internet or television or the newspaper. It is still a one-on-one people business and always will be.

If mandatory point-of-sale commission disclosure to the client isn't the dumbest idea to come down the pike in recent years, it is surely a close second. In over 30 years in the life insurance business, I have never once been asked about my compensation in any sales situation. It is, by golly, none of the consumer's business. Can't we allow the marketplace--that is, agents, brokers and the insurance companies--to determine these things? Why is it necessary to get the regulators and bureaucrats working overtime to fix what is "perceived" to be a problem.

There are certainly areas in the matter of compensation that do need attention, and the sooner the better. Companies have been sleeping at the switch for years on some of these:

* There is indeed a problem of persistence that must be addressed by companies.

* The problem of unnecessary or unwarranted replacement should be of concern.

* The issue of service fees, persistence fees and, perhaps, persistency bonuses should be addressed.

* The matter of orphan policyholders, their assignment to active agents and brokers and assignment of existing commissions (already built into the premium rate) on these should be explored. This seems to me to be a vast source of untapped potential premium income.

Richard B. Miller

Insurance Broker

Harrisonburg, Va.
COPYRIGHT 2001 A.M. Best Company, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Best's Review
Article Type:Letter to the Editor
Date:Oct 1, 2001
Words:558
Previous Article:Sept. 11, 2001.
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