NEWSLETTER NALC Members by jennyyingdi


									                                                                    A National Alliance of Life Companies

N A T I O N A L A L L I A N C E O F L I F E C O M P A N I E S An Association of Life and Health Insurance Companies

                                                     March 2012
                                                      Inside this Issue
A Letter from the Executive Director ...................................................................................... 1 
NALC Highlights ................................................................................................................ 2 
  2012 Spring Conference .................................................................................................... 2 
  Annual Meeting Notice ..................................................................................................... 2 
NAIC Focus ...................................................................................................................... 2 
  2012 E-Reg Conference .................................................................................................... 2 
  NAIC Subgroup Says Contingent Deferred Annuities Are a Life Insurance Product ............................... 3 
  NAIC Names 2012 Committee Leadership ............................................................................... 4 
News from the States ......................................................................................................... 5 
  Alaska Selects SBS .......................................................................................................... 5 
  California Lawmaker Tells NAIC to Define Its Role .................................................................... 6 
Industry News .................................................................................................................. 7 
  Total Individual Life Insurance Sales Improve in 2011 ................................................................ 7 
  Longer Life Expectancies Make Many Rethink Retirement Planning Approach .................................... 8 
Calendar of Industry Events ................................................................................................. 11 

The news in this publication, including links to background and supplemental information, is also available
on the NALC members’ website at

                                        National Alliance of Life Companies
                                                   PO Box 50053
                                              Sarasota, Florida 34232
                                               Phone: 941-379-6100
                                                 Fax: 941-379-6112
                                     Members’ Website:

         PO Box 50053  Sarasota, Florida 34232  Phone: 941-379-6100  Facsimile: 941-379-6112 
NALC Newsletter                                                                                        March 2012

                     A Letter from the Executive Director
                                                                                                   March 1, 2012
Dear Member:

                       Hope you are having a good year. As I write this letter, I am preparing for the NAIC
                       meetings in New Orleans, Louisiana, which start March 3, 2012. Last week, NCOIL met
                       in Gulfport, Mississippi. It is clearly the time for association meetings. Of course, this
                       reminds me of our NALC meeting which starts April 18, 2012, in San Diego, California.
                       Make sure you have the meeting on your schedule!

                       I wanted to share a few matters of interest with you. First, the NCOIL meeting included a
                       discussion of the unclaimed property issue which has been a matter of controversy with
                       life insurance companies for the last year. At this meeting, I believe there was greater
                       understanding of the complexity of the issue. We are working to make certain that any
final model bill produced includes provisions fair to small life companies and our customers.

Second, parallel market conduct investigations continue with state insurance departments and the NAIC. Some
states are focusing on large life insurance companies first, while others are suggesting a broader look at the life
insurance industry. At this stage, we are working with both the state legislative group and state regulators on
this matter.

A new wrinkle for our Spring Meeting will be a discussion of property insurance matters. This panel will
include current and former insurance commissioners, as well as industry leaders. We felt like you would enjoy a
discussion regarding property insurance issues as a nice change of pace. Additionally, we will have our normal
panel discussion on Thursday involving a terrific group of current insurance commissioners. It should be an
interesting discussion, given the number of big issues facing the industry.

On a final note, it looks like the economy is slowly improving in most parts of the country. In my mind, the big
obstacles remain the European crisis and a potential slowdown in China. Of course, the situation in Iran could
move energy prices further up, but Europe and China pose the more likely threats to recovery. Let’s keep our
fingers crossed that economic progress will continue in all regions of our country.

See you all in San Diego.


Jim Hodges
Executive Director

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NALC Newsletter                                                                                    March 2012

                                         NALC Highlights
                                                Register Now!
                                      2012 Spring Conference
                                             2012 Spring Conference
                                               April 18 - 20, 2012
                                              La Costa Resort & Spa 
                                               Carlsbad, California 

                                      Now is the time to make your plans to attend the NALC 2012 Spring
                                      Conference at the La Costa Resort and Spa. Please visit the registration
                                      page at There you will
                                      find the following:

                                            Online conference and golf outing registration.
                                            Online or hard-copy hotel reservation form.
                                            Sponsors and remaining sponsorship opportunities.
                                            Conference schedule.

We will send out conference updates regularly telling you of additions to the conference
schedule, sponsorship opportunities, area information, and other useful items. Please register
before the price increase and the room block expiration!

                                      National Alliance of Life Companies
                                       Annual Meeting Notice
       The Annual Meeting of the members of the National Alliance of Life Companies shall be held
       Thursday, April 19, 2012 at 11:45 a.m. at La Costa Resort & Spa, Carlsbad, California. The
       business of the Alliance shall include the election of members to fill vacancies on the Board of

       Jim Hodges
       Executive Director

                                              NAIC Focus
                                      2012 E-Reg Conference
Registration is open for the National Association of Insurance Commissioners (NAIC) and National Insurance
Producer Registry (NIPR) E-Reg Conference. This year’s conference will be held April 29 – May 2, 2012, at
the Westin Crown Center in Kansas City, Missouri.

E-Reg provides insurance regulators and industry professionals the opportunity to explore the latest technology
trends and initiatives affecting insurance regulation today. Attendees may choose from five conference

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NALC Newsletter                                                                                      March 2012

exchanges: company licensing; market regulation; producer licensing; rate and form filing; and TechEx
(regulators only).

This year, the conference will include keynote discussions addressing topics of relevance to today’s insurance
regulation. Other sessions will address the latest insurance regulatory topics, including producer licensing,
market regulation and speed-to-market initiatives. Attendees will also receive up-to-date information on key
NAIC membership initiatives and the latest technology solutions.

Hands-on training opportunities will address nearly every aspect of insurance regulation, from state producer
and company licensing to market analysis and rate and form filing. Numerous pre- and post-conference sessions
will offer in-depth instruction on a variety of regulatory topics.

Register by March 29, 2012, to receive a special discounted “early bird” rate. Those who work within a 200-
mile radius of Kansas City — and have never before attended the E-Reg Conference — are eligible to receive
nearly 50% off registration fees with the “first-time local” discount.

Register online at

NAIC Subgroup Says Contingent Deferred Annuities Are a Life Insurance
A majority subgroup of the NAIC has recommended to the NAIC's "A" Committee that controversial longevity
risk-protection products dubbed contingent deferred annuities are a life insurance product that should be written
by life insurers and not property/casualty insurers.

Because there are "life contingent pricing components" inside this product, the subgroup majority concluded
they are best written through life insurers, Felix Schirripa, chairman of the contingent deferred annuity
subgroup. These products resemble the guaranteed lifetime withdrawal benefit rider on traditional stock market-
linked variable annuities, said Schirripa, chief actuary of the New Jersey Department of Banking and Insurance.

However, the subgroup also thinks these products "present risks that are akin to those in financial guaranty
insurance" but nevertheless, a majority believed that property/casualty companies "should not be allowed to
write them," he said, noting financial guaranty normally is written by property/casualty insurers.

The debate centered on whether these products are annuities or financial guaranty insurance—with the two
biggest U.S. life insurers on opposite sides. MetLife argued CDAs are not life insurance but financial guaranty
insurance while Prudential Financial contended they're similar to a living benefit rider on a variable annuity.

The industry, "except one company," has argued these are not financial guaranty but are life insurance products,
Schirripa said. MetLife is "committed to the development of innovative products that provide retirement
income, while ensuring that the products continue to deliver on their guarantees," said Chris Breslin, a
spokesman for MetLife, in an email. "We want to work with those in the industry to make that happen."

The subgroup wants reserves and capital requirements "to be re-evaluated," Schirripa said, referring to Actuarial
Guideline 43, which governs statutory reserve requirement for variable annuities and GLWBs.

The reserving guidance in AG 43 "is fairly broad and could easily be extended to products like [contingent
deferred annuities]," he said, noting the subgroup is now seeing "potentially some risks akin to financial
guaranty insurance," Schirripa said. The subgroup is suggesting that reserving requirements need to be looked

National Alliance of Life Companies                                                                       Page 3
NALC Newsletter                                                                                        March 2012

by the regulators more carefully, he said. The subgroup no longer calls them "hybrid income annuities" but
rather what the industry has been calling them—contingent deferred annuities, which are the stand-alone
GLWBs on covered assets administered outside an insurance company; and, GLWBs that have been sold with
traditional variable annuities for years, Schirripa said.

If the NAIC opens up AG 43, "billions in reserves" could possibly be at stake for all variable annuities with
riders that are governed by this guideline, said Steven Schwartz, an equity analyst with Raymond James.

Companies that sell CDAs "want to reach buyers that would never consider buying a variable annuity,"
Schirripa said.

Schwartz said the debate surrounds contingent deferred annuities sold on non-VA or noninsurance products,
such as mutual funds. Mutual funds can't sell lifetime guarantees, only life insurers can so a mutual fund
company contracts with a life insurer to guarantee the funds. "What is that?" Schwartz said, noting the question
is whether that's the same as a VA rider.

Schwartz said he thinks it's a financial guaranty product and the problem is that life insurers aren't regulated to
sell that type of product. Financial guaranty insurance guarantees the payment performance of another party.

"Our position from an actuarial viewpoint is that contingent annuities are annuities, not financial guaranty
products," said Nancy Bennett, senior life fellow with American Academy of Actuaries, who was part of the
academy group that commented on contingent annuities at the NAIC. "They contain similar risks as VA
contracts that are already issued by life insurance companies."

However, the New York insurance department in 2009 called these contracts "impermissible financial guaranty"
contracts, and not insurance, Bennett said.

Kelly Ireland, senior counsel, insurance regulation, for the American Council of Life Insurers, said in an email
that, "the working group has reached the correct conclusion that CDAs are annuities that can only be sold by
life insurers. While the current regulatory structure for annuities is sound, the ACLI is prepared to assist
regulators on the Life Insurance and Annuities (A) Committee in their review of this structure as it applies to

Lee Covington, senior vice president and general counsel for the Insured Retirement Institute. said in an email
the IRI agrees with the subgroup's determination that these products should be classified as annuities "which
should be provided by life insurers.

"Our consistent view has been that contingent annuities are annuities under state law, so we view the
subgroup’s determination as very positive," Covington said. "We are also encouraged by their intent to apply
existing rules to CDAs in an ongoing way."

The subgroup was charged to address issues previously raised by the NAIC's Life Actuarial Task Force, which
also reports to the A Committee.

                        NAIC Names 2012 Committee Leadership
The NAIC has named its 2012 committee chairs and vice chairs, and assigned members to the organization’s
standing committees.

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NALC Newsletter                                                                                   March 2012

"This year’s committee leadership reflects the broad experience and expertise of our membership," said Kevin
M. McCarty, NAIC President and Florida Insurance Commissioner. "I look forward to working closely with
them on major initiatives this year to enhance our national system of state-based regulation."

NAIC leadership met last month to make committee assignments based on each member's preferences and
experience, as well as requirements established by the NAIC's Bylaws. These assignments are for one year. The
2012 NAIC committee leadership assignments are as follows:

Life Insurance and Annuities (A) Committee
    Chair: Julie Mix McPeak, Commissioner, Tennessee Department of Commerce and Insurance, Insurance
    Vice Chair: James J. Donelon, Commissioner, Louisiana Department of Insurance
Health Insurance and Managed Care (B) Committee
    Chair: Sandy Praeger, Commissioner, Kansas Insurance Department
    Vice Chair: Joseph Torti III, Superintendent, Rhode Island Department of Business Regulation, Division
       of Insurance
Property and Casualty Insurance (C) Committee
    Chair: Mike Chaney, Commissioner, Mississippi Insurance Department
    Vice Chair: Merle D. Scheiber, Director, South Dakota Department of Revenue and Regulation,
       Division of Insurance
Market Regulation and Consumer Affairs (D) Committee
    Chair: Sharon P. Clark, Commissioner, Kentucky Department of Insurance
    Vice Chair: Stephen W. Robertson, Commissioner, Indiana Department of Insurance
Financial Condition (E) Committee
    Chair: Joseph Torti III, Superintendent, Rhode Island Department of Business Regulation, Division of
    Vice Chair: Eleanor Kitzman, Commissioner, Texas Department of Insurance
Financial Regulation Standards and Accreditation (F) Committee
    Chair: Eleanor Kitzman, Commissioner, Texas Department of Insurance
    Vice Chair: Thomas B. Leonardi, Commissioner, Connecticut Insurance Department
International Insurance Relations (G) Committee
    Chair: Susan E. Voss, Commissioner, Iowa Insurance Division
    Vice Chair: Thomas B. Leonardi, Commissioner, Connecticut Insurance Department

                                      News from the States
                                         Alaska Selects SBS
The Alaska Division of Insurance has formally licensed State Based Systems (SBS), an NAIC owned and
operated regulatory tool.

"We look forward to taking full advantage of the many opportunities afforded by SBS from an efficiency, cost
savings and customer service perspective," said Linda S. Hall, Alaska Insurance Director. "SBS supports our
mission to improve the services we provide to Alaska consumers, licensees and companies while decreasing our
costs through an ever expanding online toolset and the guarantee that the product will keep pace with all NAIC

National Alliance of Life Companies                                                                    Page 5
NALC Newsletter                                                                                        March 2012

Alaska is the 23rd NAIC member to license SBS, further illustrating the regulatory tool's flexibility in
supporting the needs of all states regardless of size or geographic location. SBS supports the effort to lower
state regulatory costs by allowing states to share resources rather than purchasing hardware and software to
meet their individual needs.

In addition to Alaska, SBS is currently the system of choice in Alabama, Delaware, the District of Columbia,
Florida, Illinois, Iowa, Kansas, Maryland, Missouri, Nebraska, New Hampshire, New Jersey, North Carolina,
North Dakota, Oklahoma, Oregon, Puerto Rico, Rhode Island, Tennessee, U.S. Virgin Islands and West
Virginia. Limited SBS services are also licensed by South Carolina and Virginia.

Additional information about SBS is available at

                  California Lawmaker Tells NAIC to Define Its Role
U.S. Rep. Ed Royce, R-Calif., has called on the NAIC to explain what kind of organization it is and what role it
intends to play in the new regulatory landscape under the Dodd-Frank Act.

The Feb. 28 letter was addressed to NAIC President Kevin McCarty, who serves as Florida Insurance
Commissioner, and Therese Vaughan, NAIC chief executive officer. In it, Royce wrote the NAIC is undergoing
an effort to rebrand itself as a "standard-setting organization," and not a trade organization as it is sometimes
called. Royce notes that because the NAIC is designated as a private 501(c)(3) corporation under the U.S. tax
code it has consistently argued it is not subject to open-meeting laws or government accountability standards.

But at the same time, the NAIC is working to position itself as playing a key role in "form[ing] the national
system of state-based insurance regulation in the U.S.," Royce said.

"It appears, when it suits its purposes, the NAIC fends off questions about its accountability and transparency
by arguing that it is 'a private group' that 'does not have any regulatory authority.' This position is legally
essential since, under controlling law, no 'private group or association [may] regulate in the field of interstate
commerce,'" Royce wrote in the letter. "But it would now appear this 'traditional' position is politically
inconvenient given its attempts to posture itself in the new Dodd-Frank [Federal Insurance Office] regime."

The letter goes on to describe "an about-face" that Royce said may best illustrate what "appears to be an
untenable position."

On July 28, before the House Financial Services Committee, former NAIC president Susan Voss, who serves as
Iowa insurance commissioner, said the NAIC was not part of "some kind of national regulatory system" in
response to a question regarding its perceived status as a regulatory body lacking traditional accountability. But
the letter says on Aug. 7, the NAIC claimed it was integral to helping "form the national system of state-based
insurance regulation in the U.S."

"These positions seem, at the least, inconsistent," Royce said.

The letter directs the NAIC to respond in writing and answer three questions:

      Whether it is a trade organization or is it a formal part of "the national system of state-based insurance
       regulation in the U.S.?"
      Does NAIC agree that as a self-described private group, it may not regulate in the field of interstate

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NALC Newsletter                                                                                       March 2012

      Does the NAIC file documents with the IRS as a 501(c)(3) nonprofit corporation and does it feel those
       documents should be subject to public scrutiny?

The question of what kind of organization the NAIC is has come up before. The NAIC is mentioned in the
Patient Protection and Affordable Care Act, by name, more than 20 times. The act gave the NAIC—technically
not an arm of federal or state government—designated roles in developing health reform regulations.

Voss has compared the NAIC to the Federal Reserve Board of Governors. As a body, it can act with uniformity.
Yet, individual members have their own defined roles (Best's News Service, Aug. 8, 2011).

But others have argued the organization has overstepped its role in some situations. Birny Birnbaum, executive
director of the Center for Economic Justice, told the House Financial Services insurance subcommittee in
August that the NAIC holds itself out to be more than it is.

                                           Industry News
               Total Individual Life Insurance Sales Improve in 2011
Total individual life insurance grew four percent in new annualized premium in 2011, resulting in the second
consecutive year of growth. In the fourth quarter, life insurance premium rose two percent, compared with the
fourth quarter of 2010.

“For the second year in a row, strong whole life sales propelled overall individual life insurance sales growth,”
said Ashley Durham, senior analyst, LIMRA Product Research. “With the economy continuing to struggle,
consumers are attracted to the premium and cash-value guarantees along with lifetime coverage, which whole
life offers.”

Overall in 2011, companies issued two percent more individual life policies than they had in 2010. This is only
the fourth time policy sales have increased in the past 30 years. In the fourth quarter, total policy count inched
up one percent.

Whole life (WL) continues to flourish in the current economic conditions. For the year, WL premium increased
nine percent over 2010. This is the sixth consecutive year of positive growth. In the fourth quarter, WL
premium improved five percent, compared to prior year. WL policy count increased five percent in 2011.

Variable universal life (VUL) experienced a bit of resurgence in 2011. VUL was the second biggest driver of
total individual life insurance premium growth in 2011. VUL climbed 22 percent in 2011, spurred on by a 36
percent jump in the fourth quarter. However, the number of VUL policies sold dropped nine percent in 2011.
VUL policy count hasn’t increased in 29 quarters.

Universal life (UL) premium rose three percent in 2011, despite a two percent decline in the fourth quarter. The
number of UL policies sold increased for the third year in a row, up eight percent in 2011. In the fourth quarter,
UL policy count grew two percent, which was the 11th consecutive quarter of growth.

Driving UL premium and policy count growth are indexed UL products. Indexed UL premium jumped
38percent in 2011, representing about 25 percent of UL premium sold in 2011. Indexed UL policy count rose
30percent in 2011. LIMRA anticipates indexed UL sales to remain strong in 2012 as the product has proven to
be a good fit in an uncertain economy and companies continue to introduce products and/or enter the market.

National Alliance of Life Companies                                                                        Page 7
NALC Newsletter                                                                                         March 2012

While lifetime UL products represent the lion’s share of UL annualized premium at 40 percent, sales dropped
seven percent in 2011. LIMRA attributes this decline to price increases and companies leaving the market.

Term life insurance was the only product line to experience declines in both premium and policy count in 2011.
Term premium fell six percent in 2011; policy count was down four percent. In the fourth quarter, term
premium and policy count dropped four percent.

Despite the declines over the past few years, LIMRA research reveals that term life insurance continues to
represent 65 percent of coverage and nearly 40 percent of all new individual life policies issued in the U.S. are
term policies.

    Longer Life Expectancies Make Many Rethink Retirement Planning
Merrill Lynch Affluent Insights Survey Finds Individuals Grappling With Lifestyle Trade-offs, Rising
Health Care Costs and Longevity When Considering Retirement Income Needs. The survey is available
at This article is available at

Average life expectancy has risen dramatically during the last century. The U.S. Census Bureau estimates that
the number of centenarians, people who live to be 100, rose from 2,300 in 1950 to nearly 80,000 in 2010, and
will exceed 600,000 by 2050. And according to the Society of Actuaries, a 65-year-old couple now has a 31
percent chance of at least one spouse living past the age of 95.

According to findings from the latest Merrill Lynch Affluent Insights Survey™, announced today, the majority
of affluent Americans (58 percent) have a positive view of the prospect of living to be 100. However, three out
of four (75 percent) would approach their money management differently if they knew today that they were
going to live that long. To financially accommodate a longer life, they would:

      Continue to work at least part-time during retirement (39 percent).
      Work with their financial advisor to reevaluate their savings and investment strategies (37 percent).
      Invest in a lifetime income product, such as an annuity (32 percent).
      Contribute more to a 401(k), IRA or other retirement savings vehicle (32 percent).
      Purchase long-term care insurance (29 percent).
      Retire closer to age 85 than 65 (25 percent).

In light of longer life expectancies, the majority of respondents (59 percent) also believe that the age at which
Americans are eligible to collect Social Security should be raised.

This Merrill Lynch survey, which began in 2009 to examine the goals, values and financial concerns of affluent
Americans, also finds that, when it comes to retirement, age is far less of a factor today. In fact, only 14 percent
of respondents over the age of 50 cite “hitting a certain age” as the factor that would most lead them to retire.
Instead, two factors more likely to lead them to retire include feeling confident that their assets will grant them
the lifestyle they want throughout their remaining years (25 percent), and a possible health condition (18
percent) – their own or that of a family member.

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NALC Newsletter                                                                                        March 2012

“We hear from our clients that retiring isn’t about their age or a magic number, but rather an ongoing
assessment of the lifestyle, goals and assets they desire for their later years,” said Andy Sieg, head of Global
Wealth and Retirement Solutions for Bank of America Merrill Lynch. “And most don’t view this life stage as a
straight stretch of highway so much as a winding road that requires close attention and frequent course

Expecting to live considerably longer than their grandparents’ generation, affluent Americans find themselves
in uncharted territory. Many are uncertain about how to adequately save for retirement and how to turn assets
into sustainable income once retired, with more than half (55 percent) concerned about being able to afford the
lifestyle they want in retirement.

“Helping individuals and families optimize their financial resources and quality of life during retirement is not a
math problem solved solely with a calculator or single product,” said David Tyrie, head of Personal Wealth and
Retirement for Bank of America Merrill Lynch. “Achieving greater financial security and positive outcomes
during retirement is a lifelong challenge solved through insight, planning, shared responsibilities and an array of
solutions that can empower you to own the road, instead of the other way around.”

Affluent prefer delayed retirement over trade-offs to their current lifestyle
If given the choice, half of affluent Americans (51 percent) not yet retired would rather retire later than make
trade-offs to their current lifestyle. However, when push comes to shove, and trade-offs are needed to help
ensure their assets sustain them throughout retirement, 81 percent would make them, including a combination

      Trimming day-to-day expenses (38 percent).
      Purchasing fewer personal luxuries (35 percent).
      Limiting budgets for vacations (32 percent).
      Keeping the same car longer (27 percent).
      Leaving less of an inheritance (25 percent).
      Downsizing their home (24 percent).

Among those preparing to retire in the next five years, many are taking additional steps to ensure their assets
last throughout their lifetime, including saving more (39 percent), developing a plan for monthly expenses and
other financial needs once retired (36 percent), consolidating assets with fewer financial institutions (20
percent), clipping more coupons (19 percent) and providing less financial support to their adult-age children (15

Longevity and the desire to work later in life, because they have to or want to, is redefining the meaning of
retirement. The survey found that only one out of four (24 percent) define retirement as never working again.
The reality is that three out of four (73 percent) respondents not yet retired view this life stage as a second act
during which they intend to work part- or full-time. Among this group, 30 percent plans to cycle between work
and leisure after reaching the point previously thought of as retirement.

Rising cost of health care tops list of financial concerns, but few have a plan
For the third year in a row, survey respondents cite rising health care costs as their top financial concern (79
percent). One-third of respondents went so far as to say that they are more concerned about the financial strain
associated with a significant health situation, such as a chronic illness or disability, than they are about how it
may compromise their quality of life. Despite these concerns, 62 percent of respondents over the age of 50 have
not yet estimated what their health care costs may amount to during retirement.

National Alliance of Life Companies                                                                         Page 9
NALC Newsletter                                                                                      March 2012

Survey respondents believe future health care costs (26 percent) and life expectancy (25 percent) to be the most
difficult unknowns when planning for future financial needs.

Greater retirement concerns on Venus than Mars
On average, women today live more than five years longer than men1. This may be one of the reasons affluent
women (66 percent) are more concerned than men (54 percent) about their retirement assets lasting throughout
their lifetime. Women surveyed are also more concerned (76 percent) about the future of Social Security
benefits than men (59 percent), and about what the prospect of caring for an aging parent could do to their own
financial security (37 percent of women, 25 percent of men).

Also, while many baby boomers are struggling to save for and fund their retirement, most respondents (79
percent) believe that Americans under the age of 35 today won’t have it any easier. Likely to live longer and to
depend less on government entitlements and pensions as lifetime income sources, younger generations may well
have an increasingly difficult time saving for retirement unless changes are made.

Client to Financial Advisor: How do I live well longer?
When it comes to helping clients prepare for retirement, the role of a financial advisor has evolved beyond asset
accumulation strategies and portfolio structuring. Nearly half (47 percent) of affluent Americans cite that
conversations with their advisor regularly go much further than general investing to focus on broader aspects of
retirement. Financial advisors today are a source of insight and advice around how trade-offs, health care costs
and longevity may impact retirement outcomes. Retirement topics clients would like to discuss more often with
their financial advisor include:

   •   How to financially plan for the possibility of living to be 100 years old (30 percent).
   •   Managing cash flow and liquidity in retirement (29 percent).
   •   Balancing competing near- and long-term financial demands (26 percent).
   •   How they hope to live their life during their retirement years (25 percent).
   •   The impact of rising health care costs on their retirement income (25 percent).
   •   Making lifestyle choices today that will improve their long-term financial security (21 percent).

According to respondents, these deeper conversations, along with such core qualities as understanding their
current financial situation (58 percent) as well as their goals, dreams and personal values (51 percent) are what
keep them loyal to their financial advisor relationship.

“Many of our clients today face a new set of retirement challenges not encountered by previous generations,”
said John Thiel, head of U.S. Wealth Management and the Private Banking and Investment Group for Merrill
Lynch Global Wealth Management. “These findings indicate clients are looking for guidance from a financial
advisor with access to dynamic tools and resources, and a network of retirement specialists who can help them
assess their situation, develop an appropriate retirement strategy and monitor their progress. Our highly skilled
advisors deliver this valuable service to more and more clients every day.”

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NALC Newsletter                                                                    March 2012

                             Calendar of Industry Events
     March 3-6, 2012                  Hilton New Orleans
       NAIC Spring National Meeting   New Orleans, Louisiana
     April 18-20, 2012                LaCosta Resort & Spa
       NALC 2012 Spring Conference    Carlsbad, California
     July 12-15, 2012                 Location TBD
       NCOIL 2012 Summer Meeting
     August 11-14, 2012               Atlanta Marriott Marquis
       NAIC Summer National Meeting   Atlanta, GA
     September 19-21, 2012            Kingsmill Resort
       NALC 2012 Fall Conference      Williamsburg, Virginia
     November 15-18, 2012             Grand Hotel Marriott Resort
       NCOIL 2012 Annual Meeting      Point Clear, Alabama
     November 29-December 2, 2012     Gaylord National Hotel & Convention Center
       NAIC Summer National Meeting   Washington, DC
     March 8-10, 2013                 Hyatt Regency on Capitol Hill
       NCOIL 2013 Spring Meeting      Washington, D.C.

National Alliance of Life Companies                                                   Page 11

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