I contacted the NAIC, National Association of Insurance Commissioners about the general issue of consumer abuse through conversion option changes. A trusted source at the NAIC was kind enough to reply and ask me to send specific questions

“Thanks so much for allowing me to address these questions to the NAIC on behalf of the agents for whom I’m writing the article in Agent Sales Journal and mine and their clients. So you can get a base picture of the problem and my thoughts, here is a post on my blog from yesterday.


1. Does the NAIC as a consumer advocacy group have a say in changes made to conversion options in term insurance policies?
2. What is the NAIC stance on what can be called a permanent policy?
3. What would the NAIC stance be when company’s conversion options say that the conversion will be approved at the same rate class as the original policy and at the time of conversion they don’t offer a policy with that rate class available?
4. Is the NAIC aware that companies are changing conversion options because they priced both their term and conversion options so low that they are concerned they can’t meet a guaranteed cost of insurance?
5. Is the NAIC aware that companies are pulling company appointments from agents that openly discuss these problems?
6. Is the NAIC aware that companies are making these changes retroactively to in force policies without any notice to policy owners and in some cases with no notice to agents?
7. When companies ask for certain products to be excluded from conversion options do they provide the NAIC mortality statistics to justify the change?
8. On a related subject has the NAIC addressed with companies the rapidly growing problem of lapsing UL’s that were sold based on assumptions and not guarantees?

The reason I am coming to the NAIC with this is because of the attached company email I got yesterday that indicates they are waiting for state approval for a conversion product. I am also licensed in all states so getting answers from the Colorado Division of Insurance doesn’t address the question for my business or customers.

I have cc’d Rich Fuller, a general agent out of Denver, and asked him to send any other relevant questions his agents might have. I know some of his agent’s clients have been severely impacted by these changes. I will also forward any questions that come from my blog. Thanks again for your consideration and accessibility.

Ed Hinerman, Hinerman Group

Bottom line. Answers to this growing problem have to come from somewhere. I will share whatever the NAIC answers and continue to pursue it through other avenues.