There have been recent efforts by the NAIC to report on the steps exam vendors have taken to mitigate cultural bias in producer licensing exams; however, based on state-level data, this issue deserves closer attention.
There are only seven states that annually prepare and publish licensing exam pass rates by demographic, including race/ethnicity. For more than a decade, these reports have routinely shown Caucasian/white candidates scoring higher than other demographic groups across nearly all lines.
When comparing Life Insurance Exam Pass Rates by Race/Ethnicity, an alarming trend appears. It’s clear that non-Caucasians or non-white demographics are not efficiently making it through the licensing process. This clearly suggests licensing exams warrant more scrutiny, particularly to ensure these tests are not screening diversity from the industry.
The Covid-19 pandemic last year drove the biggest increase in death benefits paid by U.S. life insurers since the 1918 influenza epidemic, an industry trade group said.
Death-benefit payments rose 15.4% in 2020 to $90.43 billion, mostly due to the pandemic, according to the American Council of Life Insurers. In 1918, payments surged 41%.
The hit to the insurance industry was less than expected early in the pandemic because many of the victims were older people who typically have smaller policies. The industry paid out $78.36 billion in 2019, and payouts have typically increased modestly each year.
In the 1918 flu pandemic, the number of U.S. deaths reached about 675,000, with mortality high in people younger than 5 years old, 20 to 40 years old, and 65 years and older, according to the CDC’s website.
The ACLI’s data show two other years, both in the 1920s, when year-over-year increases topped 15%, when there also were influenza epidemics, said Andrew Melnyk, the ACLI’s vice president of research and chief economist.
It seems that not a week goes by without an announcement of another merger/acquisition transaction in the life insurance industry. With an overlay of persistent capital market volatility and a sharply increased focus on ESG risk factors, life insurance executives will have their plates full of challenges for the balance of 2021. Whether large national carriers or smaller regional players, virtually every life company will experience changes in their operating environment. Our panelists will share their perspectives on how these trends will shape the insurance markets and discuss the implications for credit and risk management.
Author(s): Peter Giacone, KBRA; Celeste Guth, Erinn King, David Marcinek
The Washington-based federation says life insurers ought to at least answer basic questions, such as whether they will require applicants to use COVID-19 vaccines, what kinds of tests and test results they’ll require and whether and how standards might vary by applicant age.