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Walt Bernard Podgurski,  Editor,  440-773-1108, 

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Editorial Mission Statement: The goal of this publication is to provide readers a broad selection of what is being written about the insurance industry and related issues. Some articles may have a “tilt” towards a particular perspective one way or another. Inclusion in this newsletter is not an endorsement of any views or content; but report the various and differing views appearing in media.
  Tuesday, 03/19/19 - https://DailyInsuranceReport.com 

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Reinventing Life Insurance Agency Distribution Globally
Life Insurers Must Improve Distribution, Which Is Consuming an Increasing Share of the Industry's Total Economic Value, Particularly Compared with Customers' Declining Share, According to a BCG/Morgan Stanley Report
NEWS PROVIDED BY Boston Consulting Group (BCG)

NEW YORK, March 18, 2019 /PRNewswire/ -- Life insurers globally face multiple challenges and among the most critical is the sustainability of their agency distribution models. After decades of limited innovation, distribution is on the cusp of major change, which will unlock benefits for all stakeholders, according to a joint research report from Boston Consulting Group (BCG) and Morgan Stanley Research, Reinventing Life Insurance Agency Distribution Globally.

This report draws on more than 50 interviews with senior insurance executives; a survey of 850 agents in China, India, Germany, and the United States; and detailed proprietary financial modeling. It envisions a hybrid agency model in which agents, empowered by technology, are embedded in multichannel, and multisolution ecosystems focused on addressing customers' holistic needs across their lifetimes.

The Economic Fundamentals Are Broken

One of the report's major conclusions is that the fundamental economics of the global life insurance industry are broken. Over time, distribution has consumed an increasing share of the industry's total economic value, particularly compared with customers' declining share. To restore balance, carriers need to reinvent their distribution to improve productivity. For example, by investing in data and predictive analytics capabilities, carriers can provide agents with highly qualified leads. BCG's Calvert says: "By improving productivity, carriers can help lift an agent's overall level of compensation while also reducing per unit sale compensation. This will attract new talent, while increasing economic value for customers and shareholders."
A copy of the report can be downloaded here.

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Principal Financial close to Wells Fargo retirement unit acquisition-sources
By David French / Reuters

Principal Financial Group Inc is in advanced talks to acquire Wells Fargo & Co's retirement plan services business, in a deal that could exceed $1 billion, people familiar with the matter said on Sunday.

Wells Fargo has been seeking to streamline its business as it grapples with the fallout of customer abuse scandals. The bank is prohibited from growing in size after the Federal Reserve slapped it with an unprecedented asset cap in February 2018, citing "widespread consumer abuses and compliance breakdowns."

The bank's retirement plan services unit, which includes Wells' 401(k) savings accounts business, would expand a similar business of Principal Financial. If the negotiations are concluded successfully, a deal could be announced later this month, according to the sources, who spoke on condition of anonymity as the information is confidential.

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How states can support federal reforms for cross-state health insurance sales

Republican politicians and activists have called for regulatory changes that would allow cross-state sales to become more prevalent for decades. That hasn’t happened yet, but they soon may get their wish. In October 2017, President Trump signed an executive order promoting choice and competition in health care, and in early 2018, the departments of Health and Human Services, Labor and Treasury responded with proposed regulatory changes. Their recommendations included easing federal restrictions on association health plans (AHPs), making it easier for associations to band together to provide quality, lower-cost insurance to employees.

More recently, a number of federal agencies collaborated on a report, “Reforming America’s Healthcare System Through Choice and Competition,” which outlined options for market-based reforms at state and federal levels. Even within the constraints of the ACA, these actionable opportunities were identified as a means of reducing costs and increasing access to quality health care. Last week’s bid by CMS for comments on cross-state sales of health insurance is the latest example of federal action that follows the logic of the president’s executive order and trend towards market-oriented solutions.

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Is it ever a good idea to hold company stock in a 401(k)?
Lee Conrad / FinancialPlanning

Is it ever a good idea to hold company stock in a 401(k)?

Workers will be better off limiting their employer stock holdings in their 401(k) account because of the risks involved, writes an expert on Morningstar. “At the portfolio level, heavily weighting single stock – any stock — has the potential to make that portfolio more volatile than one that's more diffuse,” the expert explains. “Moreover, because company stock ownership is much heavier among larger-cap stocks than smaller ones, it's much more likely that the investor who owns a heavy stake in the company also owns additional shares in that same company through any mutual funds in the portfolio.”

The coming bear market will be especially painful for the boomers

Older investors should brace for the coming bear market and downturn, as it would have a severe impact on their portfolio, writes a Forbes contributor. “When that next recession and bear market hit, it will take even longer to bounce back. The recovery will be even slower than this last one,” the expert explains. “My research shows that large amounts of debt slows recoveries. Very large amounts create flat economies. And we are approaching very large amounts in the U.S.”

Health Care Technology Predictions For 2019
Charles Aunger, Forbes Technology Council / Forbes

In 2019, health care information technology (HIT) in the U.S. will continue to be transformed by external forces from around the world. To be honest, the whole of health care is feeling the pain of this evolution, and there are challenges that need to be met head-on.

But there are also inklings of light at the end of the tunnel. The digital transformation of this sector is only in the embryonic stages, but there’s clear evidence of enormous development and growth on the horizon. Here are my top five predictions for health care technology in 2019.

1. There Will Be A Major Push Toward Truly Digitized Health Care
2. AI Will Start To Penetrate The Broader Health Care IT Landscape
3. The Transition From Data Centers To The Cloud Will Accelerate
4. Cybersecurity Attacks Will Continue To Escalate
5. The Mobile-First Movement Will Gain More Traction

Wealth managers ignore 401(k) plans at their peril
Fred Barstein / InvestmentNews

Many wealth managers and financial planners who never intended to focus on the 401(k) or 403(b) market might nevertheless have a few plans. Most are just accommodating an important client and, at best, view the plan as a distraction. At worst, it's a royal pain, since they must deal with so many unsophisticated investors with low account balances as well as the fiduciary liability under the Employee Retirement Income Security Act.

But these advisers should pay more attention to corporate retirement plans even if they never want to become a specialist.

The so-called "accommodators" in the defined-contribution industry might have a client who owns a business or is a high-level executive who asks the adviser to help manage the organization's retirement plan. Many smaller business executives or owners do not want to have to find and deal with an extra adviser, instead relying on those they already know and trust.

As the DC retirement plan matures and gathers more assets, it becomes more attractive to retirement plan specialists. These specialists might convince the powers-that-be that they should fire the current adviser because they are not meeting with employees regularly, providing proper fiduciary protection for the organization, helping with plan design or making sure the plan is running smoothly. Not to mention that fees may be too high.

Insurance agent who stole personal information to open fraudulent policies sentenced to probation
Sady Swanson / Fort Collins Coloradoan

A Larimer County life insurance agent who investigators said used his fellow church-goers' information to create fraudulent life insurance policies was sentenced to probation.

He pleaded guilty as part of an agreement from the Larimer County District Attorney's Office, according to court records. As part of that agreement, the district attorney dismissed 72 other charges.

On Monday, Nebeker was sentenced to 30 days in the Larimer County Jail and six months probation. He is also required to complete 120 hours of community service.

Nebeker was indicted by a grand jury in March 2018 after being accused of creating more than 80 fraudulent life insurance policies using information from his fellow church members so he could collect commission.


Monday, 03/18/19 - Health Insurance Department takes over Arkansas marketplace

Tuesday, 03/12/19 - Should your 23andMe results make your insurance costs spike?

Wednesday, 03/13/19 - Barron's Annual Top 1200 Financial Advisors Ranking

Thursday, 03/14/19 -
First-Time Female Founder Nabs $25 Million to Expand Health Site


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Walt Bernard Podgurski - - Editor