In This Issue

videoVideo Marks Upcoming 100-yr Anniversary of Tax-Free Life Insurance Benefits

A new video released during NAIFA's 2012 Career Conference and Annual Meeting offers a history of NAIFA's important role in ensuring that American families and businesses receive tax-free death benefits and inside build up on their insurance products.

 

2012-2013 Tax Challenges - NAIFA Protects Your Business
2012-2013 Tax Challenges - NAIFA Protects Your Business

 

Nearly 100 years ago, NAIFA members were instrumental in ensuring that life insurance benefits would not be subject to the then-new federal income tax. Today, NAIFA continues its advocacy efforts to educate Congress on the importance of life insurance and annuities to the American public.

 

As 2013 promises to be a bellwether year for the tax status of life insurance products, NAIFA is ramping up efforts to ensure tax reform does not threaten these products, the agents who sell them, or the families and small businesses who rely on them for financial protection.

 

These efforts will include the NAIFA 2012 Congressional Conference, announced at the recent Annual Meeting. On April 8-9, 2013, life insurance agents will take their case directly to Congress in meetings with members and staff on Capitol Hill. NAIFA has set the goal to have 2 members from every congressional district attend; so save the date, your voice needs to be heard!

membership"Hold'em & Hook'em": Membership Contests Offer Cash Prizes

Next September, NAIFA members from across the nation will descend upon San Antonio, TX for the 2013 NAIFA Career Conference and Annual Meeting.

 

With the spotlight soon to shine on the Lone Star state, 2012-2013 Membership Chair Jason Talley set the agenda for the year: help the light shine a little brighter, by claiming the top spot in membership.

 

Texas currently sits in 3rd in number of members, behind California and New York. To help propel Texas to #1, several contests are underway, with the theme "Hold'em & Hook'em." Through a two-pronged attack of member retention and new member recruitment, #1 is within reach.

 

Contest Details:

  • $250 drawing: Receive 1 "ticket" per member recruited.
  • $500 top prize: To the person who recruits the most new members.

 

Additionally, your local association is eligible to earn up to $800 -- $400 for member retention and $400 for new member recruitment -- so make it a team effort! Click here for further contest details, and good luck!

challengesTax Challenges Ahead in Washington

Unless Congress acts before the end of this year, massive tax increases are set to take effect on January 1, 2013: higher marginal tax rates for all taxpayers, higher tax rates on capital gains and dividends, a $1 million exclusion and 55% rate for the estate tax, and more. The federal government borrows more than a third of every dollar it spends and therefore needs significant revenue to address the debt crisis.


Members of Congress from both sides of the aisle are talking about taking away deductions, exemptions, and special tax rates-to raise revenue, lower marginal tax rates, or both. Among the top 20 tax changes that would "score" as generating the most revenue are: taxing employer-provided health insurance and retirement savings, inside buildup in life insurance and annuities, cafeteria plans, and IRA contributions; raising capital gains and dividend tax rates; and eliminating stepped-up basis for capital gains at death.


NAIFA is educating lawmakers about the unintended consequences of raising taxes on insurance and long-term savings: less financial security for American families and businesses, more reliance on government entitlement programs, and less capital investment and economic growth. 

pacNAIFA-Texas Leaders Meet with Lawmakers; PAC Funds Make it Possible
Jason Talley and Des Taylor met with Dr. Campbell (center) at the NAIFA-Texas offices recently.

Last week NAIFA-Texas CEO and Chief Legislative Officer Des Taylor and Government Relations Chair Jason Talley sat down with Dr. Donna Campbell, candidate for Senate District 25. Dr. Campbell upset the district's incumbent, Senator Jeff Wentworth, in the Republican primary and promises to be a rising star in the Texas Senate. Taylor and Talley held a substantive discussion of legislative issues/opportunities with Dr. Campbell, in addition to sharing what NAIFA-Texas members do to assist Texans and presenting a Texas IFAPAC campaign contribution.

 

While developing new relationships is important, maintaining established relationships is equally as important. Taylor has done just that in visiting with Attorney General Greg Abbott twice in the past month. Issues discussed included challenging the constitutionality of Dodd-Frank, healthcare exchanges, additional federal mandates of Obamacare and the upcoming 83rd session's challenges to the insurance industry and, in particular, to agents and advisors. Abbott keynoted a 2005 NAIFA-Texas event, and Abbott has graciously accepted an invitation to speak again at NAIFA-Texas' upcoming Legislative Luncheon, January 22, 2013.

 

Attorney General Greg Abbott (center), with Des Taylor and Mark Warren at the 2005 NAIFA-Texas Career Conference & Annual Meeting.
 

From El Paso to Abilene to Victoria, NAIFA members that serve as grassroots "key contacts" are having similar meetings with candidates and delivering checks on behalf of IFAPAC at a feverish pace. These PAC contribution checks are made possible only by the NAIFA members who have stepped up to write checks themselves. IFAPAC contributors understand that the objective is to help bring into elective office (and try to keep in office) the legislators who believe in NAIFA's goals. NAIFA members who are not currently contributing should ask themselves where their business practices would be if their association brethren weren't carrying the ball for them. If you're still on the sidelines, it's time to get off the bench and get into the game. Contribute to IFAPAC today. See more evidence of advocacy in action on our Facebook page.

conferenceFirst Woman Elected to NAIFA Presidency, Proposals Receive Vote

NAIFA's representative governing body, the National Council, elected new officers and trustees and voted on several proposals during the final session of the 2012 NAIFA Career Conference and Annual Meeting, held in Las Vegas Sept. 8-11.

 

McNeely with GOP vice presidential candidate Paul Ryan

Juli McNeely, CFP, CLU, LUTCF defeated Keith Gillies, CLU, ChFC, CFP in the contested race for secretary. She is the first woman to be elected national president in the association's history, which dates back to 1890. Following her term as secretary, she will ascend to the position of president-elect and then to the NAIFA presidency in 2014-2015.

 

National Council delegates also voted on three proposed bylaws amendments and one proposed resolution, with the following results:

 

FAILED: Bylaws amendment to change the NAIFA Board selection process to provide for the recommendation of a vetted slate of candidates for the positions of Trustee and Secretary (instead of election).

 

FAILED: Bylaws amendment to give the NAIFA Board the sole authority to set national dues, with the limitation that national dues not be raised more than once each year.

 

FAILED: Bylaws amendment to increase national dues by $15.00.

 

PASSED: Resolution seeking a commitment from the national and state associations to enter into partnership agreements.

 

The outcome was consistent with the NAIFA-Texas position going in to the National Council session.

 

NAIFA's new president is Robert O. Smith, CLU, ChFC, JD. Joining Smith on NAIFA's Executive Committee are: President-elect John Nichols, CLU, MSM; Treasurer Matthew S. Tassey, CLU, ChFC, LUTCF; and Secretary McNeely. Robert A. Miller, MS, MA becomes immediate past president.

 

Elected to the board for the first time are: Kevin L. Bell, CLU, ChFC, JD; Michael O. Brown, LUTCF; Bob Buxman, LUTCF; and Jerry S. Flowers, LUTCF, CLTC. Remaining on the board as trustees are: Thomas M. Cothron, LUTCF; Brenda D. Doty, LUTCF, RHU, CLU; Paul R. Dougherty, LUTCF, FSS; John S. Holmes, III, LUTCF; Matthew S. Huntington, CLU, LUTCF; Lisa Laliberte, CLU, ChFC, CASL; and Van B. Land, LUTCF, RFC.

calsuranceCalSurance Loss Prevention Tip: Suitability

Our agent in this example was acting as a registered representative for a large broker dealer. Over time, he developed a clientele that included several senior citizens for whom he was entrusted with their life savings. These clients had varying degrees of education, but lacked any significant degree of financial sophistication. As fate -- and the financial markets would have it -- the senior citizen clients suffered losses in excess of $1,500,000 from investments made by the registered representative. The clients filed a FINARA action and alleged investments in high commission and "risky" products such as variable annuities, inverse and leveraged exchange traded funds and real estate investment trusts were not suitable for their stated risk tolerance.

  

Risk Management Tip:

Whether you are selling term life insurance, variable annuities or more sophisticated investments - know your client! A financial needs assessment will help identify potential products for your client; however, don't overlook your client's financial sophistication level and their risk tolerance. Routine risk tolerance questionnaires are typically sent every other year by broker dealers. One should be obtained from your clients, maintained in their file and followed. As your client's life situation can be more dynamic, more frequent communication is recommended. Written documentation when a product or investment deviates from stated risk tolerance can save you when the market underperforms against your client's expectations. Confirm your joint decisions with the client and clearly state the risk levels of the products.

 

For more information about CalSurance and/or to apply online, visit www.naifaeo.com or call 888-833-2304.

 

Additionally, save 10% on your premium by completing a new online risk management course available exclusively to NAIFA members. The course is free, or pay a nominal fee to receive CE credit as well. For more information, visit naifamember.smartpros.com.

newsINDUSTRY NEWS HIGHLIGHTS

ceoCommitment to NAIFA's Mission is Crucial, CEO Says

Dr. Susan B. Waters has been CEO of the National Association of Insurance and Financial Advisors since March 2010. NAIFA has a membership with a focus that includes annuities, life and health insurance, and financial advising. Waters has more than two decades of experience in professional association management. Full story.

gainsRomney Gains Ground on Health Care Among Voters

Republican candidate Mitt Romney's strong performance in the presidential debate has cost President Obama his large lead on health care and Medicare issues among voters. Full story.

romneyRomney: Repeal Obamacare and Grant States Medicaid Power

Poll sponsors said Mitt Romney won the first of the three 2012 presidential debates Wednesday. CBS News, for example, reported that 46 percent of the 500 uncommitted voters it polled after the debate said Romney won. Only 22 percent said Barack Obama won. CNN said 67 percent of the likely voters it polled thought Romney won. Full story.

advantagedTax-Advantaged Status of Life Insurance at Risk, Warns Experts

Here's the problem in a (large) nutshell: The dominant independent life insurance distribution channel is disproportionately focused on the affluent market while largely ignoring the middle-income market. The low-income market is completely ignored, doomed to rely on public assistance in the event a family's breadwinner dies prematurely. Congress perceives the life insurance industry as catering only to the affluent, making the industry's products vulnerable to the loss of their long tax-advantaged status at the hands of a revenue-starved federal government. Full story.

mlrMLR Bill Passes House Energy & Commerce Committee

Legislation that would exempt agent commissions from the medical loss ratio (MLR) calculation mandated under the health care reform law passed a House committee September 20. Full story.

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