I still own the domain name “You Just Can’t Fix Stupid.com” and this is one of those days when I would like to dust it off and go live with it. The new American General Life Insurance “Smart Score” underwriting system has just recently nuked a perfectly good case, and yes I shopped it and fully disclosed everything up front and with the blessing of their trial quote I submitted the application. Allow me to share with you the email this disaster started with.

“PI born 3/4/72, 6′, 320 (-30 last 12 months), non smoker. Type 2 diabetes last 9 years. No collateral health issues. A1c’s normally between 6.8 and 7.4. 3/13 A1c 8.8. 5/4 was 7.8. Father died cancer late 50’s. Takes Metformin 1000 mg x2, Glimipiride 4 mg, Januvia100 mg, Atorvastatin 20 mg and Pioglitazone 45 mg. Most recent cholesterol 195, hdl 65 and ldl 110. Looking for $100k-$500k term.” American General gave a tentative quote of table H to decline. In my 15 years in impaired risk that simply meant that the clients labs and records better reflect that information or better or it would be declined. That was a risk I was willing to take after reviewing all of the information with the client. The smart score completely trumped the trial.

So the application went in and the exam was completed and the company declined it saying that it had a smart score of 355 which was too high to allow an approval. This was the first I had heard of a smart score so of course I was very interested to know what that was. It is apparently a formula that was created by CRL laboratory that gives a value to each lab result as well as build and your sex and age. I plowed on thinking certainly this new system doesn’t replace their staff of underwriters. American General has always had some of the best impaired risk underwriters in the industry. Boy was I wrong. I asked them the reasons for the decline, in other words, what was different from the quote request I had sent. Their answer was his build, his hbA1c and his fructosamine.

I reviewed the exam and it showed that instead of the 6′, 320# I had put in the trial he was actually 6’1 and 310#. I thought, well, this must be a mistake. His build is actually better than the one I had included in my quote email. (me scratching my head??) And the A1c I had given in my quote request was 7.8 but the truth on the labs was that it had continued to come back to within what I had mentioned was a normal range for him at 7.4. Again the facts were better than what I had presented on my trial so I am really scratching my head. And the last thing was the fructosamine which was 1.71 on a normal scale of 1.20 to 1.70. Can you say margin of error? Every lab result has one.

So I asked the client to send his labs and  Smart score summary so that I might learn from it. What I learned was that in order for him to hold on to that table 8 and not be declined he would have had to have a score of 150 or less and as you can see they awarded him 100 points for his BMI and 300 for his A1c gave him a starting score of 400. They even gave him another 25 points because his SGOT was 20 when it should have been between 12 and 42. I always thought 20 on a scale where you’re supposed to be above 12 and below 42 would be a good thing, but not on a smart score card I guess. They didn’t penalize for the fructosamine which was, albeit barely, out of the normal range. The truth is that even though my trial quote said there was a possibility of approval, with the smart thing he didn’t have any chance of approval even though the information was better than presented in the trial.

Bottom line. I can’t tell you how ticked I am that a live underwriter would have approved this and a computer program told him not to. Why don’t we just all have bar codes and applying and decisions could be instant. Let’s hope other companies aren’t like lemings and go over the cliff with American General. Anyway, if you have run into a problem with American General’s new Smart score underwriting, call or write me directly. Other companies haven’t bailed in the direction of computer underwriting. My name is Ed Hinerman. Let’s talk.


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