Insurable Interest Canadian Insurance Blog

What You Need to Know Professional titles may have more to do with marketing goals than with everyday activities. Much of the current confusion stems from the rise of cross-selling. The author believes that advisors are fiduciaries and that salespeople sell. For me, after spending 27 years in career agency life insurance sales, one thing is clear: We were not and could not be considered fiduciaries. The training, incentives, compensation and rewards were based on sales production. When I entered the life insurance sales industry in 1992, we obtained an insurance license, not a securities license. We sold insurance and annuities. From the first employment interview, it was clear who we were, what we did, and how we were compensated. Life Insurance is a risk-sharing management tool. Life insurance was created to pool premiums to cover those who suffered a loss. Many paid premiums to help the few. It was a protection tool, not an investment tool. Originally, we had two types of solutions. If consumers decided their risk was temporary, they bought term life. If their risk was permanent, they bought whole life, and, later, universal life. Commercial annuities provided similar protection for people who lived longer than expected....

Unlike many peers, clients have largely stuck with him, a show of faith at a time when other managers are getting chased out of a market dominated by a small coterie of tech mega-firms. The Russell value index has lagged its growth counterpart in all but two years since 2012. Earlier in 2024, it sank to a record relative low as chipmakers and software stocks rallied amid the artificial-intelligence craze. In turn, the population of actively managed funds dedicated to value peaked near 1,100 in 2015 and has since fallen 15%, according to data compiled by Bloomberg Intelligence mutual fund analyst David Cohne. Those that survived have been leaning into technology equities, mostly growth names. As of the end of June, the average large-cap value fund was over-exposed to the group — which includes Apple, Microsoft, Nvidia, Amazon.com, Meta Platforms and Alphabet — by 426 basis points, the second highest quarterly reading since at least 2012, data compiled by Goldman Sachs Group Inc. show. Still, whether a stock is a bargain depends on who’s judging it. Value can be sliced and diced endlessly and index providers can’t agree on a definition. Some value managers appear to have taken advantage of selloffs in...

Analysis details: The Chicago Fed economists conducted the analysis to address concerns that life insurers’ large investments in office mortgages and in commercial mortgage-backed securities backed by offices could perform so poorly that the office slump might kill life insurers, cause a run on life insurers’ assets, and start or amplify financial system problems. The economists wave off objections that life insurers are set up in such a way that the customers can’t run in and get their assets out. “Runs in the insurance sector have occurred in the past,” the economists write. In 1991, they report, policyholders ran on Executive Life, a company with large, poorly performing holdings in bonds issued by companies with low crediting ratings, and asked for policy withdrawals and annuity surrenders equal to about 30% of the value of the insurer’s life and annuity product liabilities. The economists included all U.S. life insurers in their analysis but looked in depth only at a few dozen insurers that they believe could have more than $250 million in commercial real estate losses in a crisis. They look at a crisis roughly comparable to the current slump, not a more severe slump. In that scenario, losses in New York could cost life...

What You Need to Know About a quarter of millennials and Generation Z without children do not plan to become parents, a MassMutual survey found. Financial factors are the biggest driver of this decision, according to the survey. More than half of parents of kids under 18 said they worried about having enough money to support their family. Few would disagree that starting a family puts a financial strain on new parents. Today, many younger Americans are taking that to heart and opting to continue their childfree lives, according to MassMutual’s latest Consumer Spending & Saving Index. MasMutual’s third-quarter survey found that 23% of millennials and Generation Z without children do not plan to become parents. The most common motivations for remaining childfree are a preference for the financial freedom that comes from not having children and the inability to afford children. Thirty-one percent of both generations say they do not plan to become a parent because of the social and political world their children would inherit. “With today’s financial stressors, it is understandable why there is a growing trend among young adults to prioritize financial security over parenthood,” Paul LaPiana, MassMutual’s head of brand, product and affiliated distribution, said...

What You Need to Know The advisor allegedly sold phony notes in an effort to buy a faith-based marketing company. A former pastor in Tennessee who promoted a “faith-based” investment approach to Christian clients through his registered investment advisory faces Securities and Exchange Commission civil charges that he sold over $2.4 million in fraudulent promissory notes to at least six people. Without admitting or denying the allegations, Donald Anthony Wright, 54, of Cookeville has consented to an injunction permanently barring him from buying or selling any security, with certain exceptions, and to a permanent bar from serving as a public company officer or director. In a civil complaint filed Tuesday in U.S. District Court in Tennessee, the SEC alleges Wright and his registered investment advisory firm, Retirement Specialty Group Inc., recommended and sold the phony notes from June 2021 to July 2023. In promoting and selling the notes, some of which promised monthly interest of up to 20%, the SEC alleges, Wright, a former senior church pastor, misled investors regarding the nature and safety of the investments. Wright falsely told investors — at least five advisory clients and one other person — the notes were secured by real estate, that investing in...