According to the report published by the Bureau of Labor Statistics, the U.S economy has gained almost 236,000 jobs during last month. As stated by Alan Krueger, chairman, Council of Economic Advisors, there is more action to be taken to improve the rate of employment in the country, but the employment report published today clearly confirms recovery actions that started during the mid-2009, is rapidly witnessing a growth, contributing to a significant reduction in unemployment.

The growing unemployment rate, as a result of recession, has caused the yields on United States Treasury notes and bonds to rise significantly rise. The total yield on benchmarked 10-year note is up from five basis points to 2% by the close of the market. Higher yields have often been reported to affect the life insurers significantly because they have huge amount of fixed income securities in their portfolio of investments. Lower interest rates, as a result of economic recession, have further worsened the life insurers’ investment capabilities.

According to Adrian Miller, Director, GMP Securities, director of Fixed-Income Strategies, growing yields tend to be increasingly lucrative for life insurance companies, pension fund providers, and others who need duration. The market shares of the leading life insurer in the United States have already grown this year, much ahead of any immaculate stock market gains. Last week’s closing rally in life insurance stocks clearly showed that how sensitive are insurance companies’ market shares to the increasing rate of interests. Followed by this, the market S&P 500 Index grew only 0.5% of market closing on Friday.

However, it is expected that further boost in employment will positively affect the shares of leading life insurance companies in the United States.

In 2011, investors Michael Myers and Susan Myers filed a case with FINRA, alleging negligent supervision and civil fraud done by Hahn, among many other misdeeds, as reported by the ruling. The case particularly involved around the investors purchasing a risky life insurance plan whereby the policyholders pay premiums with loans that are usually bound with variable rates of interest. It is reported that Karl Hahn went to great extent to convince the investors for paying $1.9 million in the life insurance deal held outside of Deutsche Bank. He also advised the couple not to mention about this deal to anyone at the bank or other investors. He also didn’t mention that his father would get a large portion of the investment, almost $600,000, to be paid as commission.

The couple from Nevada has sought $2.2 million as compensatory damages, and almost more than $13 million for punitive damages. On the other hand, Deutsche Bank is undergoing major litigation procedures due to alleged misconduct by Hahn. According to the lawyer for Myers, the Deutsche Bank and Karl Hahn are to be blamed for such life insurance transactions, which caused substantial losses for the couple. However, FINRA panel has dismissed the case filed against Oppenheimer and Company where Hahn worked after resigning from Deutsche Bank.

In this context, Josh Stirling, Sanford C. Bernstein & Co. analyst said that AIG is spending a lot of efforts in making Chartis turnaround. When this effort starts off to deliver results, revenues will automatically start incoming. At the same time, AIG is expecting a profit of 5-10 cents in underwriting on every dollar of premiums collected for property-casualty coverage by the end of the year 2015. As reported by Stirling, the insurer can achieve the projected profit by cutting expenses, increasing the coverage costs, and performing better in evaluating he risks and handling insurance claims.

AIG is primarily focusing on building a profitable business than making revenues on premiums, said Peter Hancock, CEO of property-casualty unit. He is particularly improving the focus on the emerging markets, and dipping business in segments that demands the insurer to hold increased capital. Talking about the narrow focus that CEO Benmosche has adopted to rescue the company from its tarnished position, Timothy Massad, Treasury assistant secretary for financial stability said that AIG is a completely different company today. It is much smaller, and primarily focused on key insurance services; hence, it is less risky as well.

Benmosche has successfully restored the brand name ‘AIG’ to the property-casualty and United States life insurance units in 2012, exemplifying how the company bought back a major portion of the shares to wind down bailout. At the same time, the CEO has also introduced a new company logo, and agreed to sponsor the rugby teams in New Zealand.

In keeping with this, this life insurance provider has made an announcement that the participating policy holders will get to enjoy a dividend payout of $100 in the following year, 2013. This is a notable 8 percent increase as compared to the divided paid out in the year 2012. Despite the low interest rates persisting in the market today, this life insurance provider is able to payout a higher dividend because of the strong performance in terms of company operations. Another reason the company has been able to perform better than expected is the fact that most of its policy holders continued to hold on to their life insurance policies, despite the challenging economic condition.

Mark Pfaff, the executive vice president of New York Life, said that the increase in the sales of whole life insurance policies is proof to the fact that Americans prioritize safety and financial security for their family over everything else. Despite the challenging times, the stability and performance of the company has given policy holders the much needed peace of mind, he opines.

The annuity sales of this company also saw an increase of 16 percent, in addition to the growth in the sales of life insurance policies. The sales of mutual funds also witnessed as increase of 10 percent as compared to last year. In the third quarter of this year, there has been a 4 percent increase in the number of New York Life agents.  In 2012, there have been 2,396 new agents already hired out of the intended 3,700. A highlight of this year’s recruitment is that close to 79 percent of the agents hired represent cultural markets or are women. Mr Pfaff opined that the diverse work force in the company is propelled by the changes in the country’s population.

Vargas stated that he has been completely rehabilitated and he did not deserve additional punishment but his statement appeared unapologetic and rambling.

Vargas was the president of Provident Capital Indemnity Ltd. He was convicted on 10 money laundering and fraud counts in April. Prosecutors claimed that thousands of people from many parts of the world were victims of the scam.

Provident Capital sold bonds that guaranteed funding to life settlement companies that bought various life insurance policy programs from thousands of people at less than the face values of the insured amounts and collected the benefits when the insured people died. Provident sold these bonds based on falsified financial statements. The bonds did not have any protection from reinsurance agreements with foremost insurance companies, which was a claim that Vargas made. Due to this malpractice, several depositors lost their entire life savings.

One of the victims of the scam by Vargas was Paula Whitaker, a retired teacher and counselor in Magnolia, Texas. She happened to lose $1 million that she has saved by taking three jobs simultaneously and she has saved the money to start a charitable organization. The Charity was to be a memorial to her son, who died at the age of 25 and his dream to become a nurse remain a nurse.

Another victim from Naperville, Illinois was Therese Giger, whose husband has saved $500,000 for the treatment of his cancer. The loss resulted in his death and he died without peace of mind in his last days.

Federal prosecutors requested the judge to impose a strong sentence so that there would be a clear message that such grave financial crimes would be severe. The attorney of Vargas has requested a prison sentence of 20 years.

This sentence of 60 years is similar to the one given Adley Abdulwahab, working for a life settlement firm, A&O, which did business with President. While one more principal of A&O received 45 years sentence, other conspirators in the scam received somewhat shorter sentences. Another accountant who conducted a phony audit of Provident is likely to receive his sentence in October.

The Provident and A&O trials were in Virginia, since many transactions and victims were from that area. Whitaker and Giger were very satisfied with the sentence to Vargas, since they also received life sentences due to his fraudulent activities and he would not be able to harm others any more.

The new guidelines that have been approved by the NAIC is related to the life insurance products such as term life insurance products (universal life – UL) and products that offer secondary guarantees (ULSG). As a result of this move, the insurers in the United States have to increase their reserves on these products that they offer. All policies that will be initiated after the 1^st of January, 2013 will have to comply with these regulations.

Insurers experts opine that this could herald certain major changes in the life insurance sector. Insurers may come up with newer policy offerings in order to minimize the impact of the new guidelines that have come into play. The insurers feared that the new guidelines would make it necessary for them to have very high reserves. However, since the impact was not as much as they feared, the response to the new guidelines has been positive this far.

The new principles based approach for universal life products has to be brought into effect for all policies that will be issued on or after January 1, 2013. Insurance companies will be given the authority to determine the level of reserve based on the analytical reviews of the products they are offering. Experts says that the reserves on certain products will increase significantly starting next year. Therefore, insurers have begun working round the clock to come up with new offerings in order to reduce the impact of this move.

One of the principle actuaries at Milliman, New York, Steven Schrieber, says that it is imperative to insurance companies to come up with new offerings at the earliest. He also says that the time available is extremely limited since it is not enough to just draw up the policy requirements. insurers also have to submit the policies all the states that have their presence and seek their approval before setting up a system in place to issue these new policies. However, Schreiber also says that it is impossible to determine the impact of the new guidelines at the moment since it is company specific and product specific.

A press release revealed that John Hancock Life Insurance won eight industry awards, including two prestigious ‘Awards of Excellence’. These awards have been from Insurance Marketing Communications Association and Insurance and Financial Communicators Association (IFCA) for offering outstanding sales materials.

Donna LeBlanc, Assistant VP, Sales Operations and Marketing Communications, John Hancock Life Insurance, mentioned that these awards reflected the ongoing commitment of the company to develop unique and innovative insurance materials that showcased their wide range of products and services. She added that the company was proud for getting this recognition in being different from competitors and in offering high quality sales tools and materials.

The Awards of Excellence received by John Hancock were for the mailing package ‘Treat Yourself to New Entrees in the Market’, the campaign of ‘ShamRock Saturday’ and the microsite ‘JH Life Products’.

John Hancock launched three distinct multimedia product campaigns, Indexed UL, Term Life, and Premier Life. The mailing package ‘Treat Yourself to New Entrees in the Market’ and the microsite ‘JH Life Products’ have been part of these multimedia campaigns.

The microsite http://www.jhlifeproducts.com/ provides easy and quick ways to producers for locating sales materials, calculators, and case studies for each product. IFCA mentioned that the site has been a well executed great concept while selecting it for ‘Awards of Excellence’ and mentioned that this was definitely expected from John Hancock. The judges of IMCA offered high scores for the mailer, ‘Treat Yourself to New Entrees in the Market’ for excellence in design, content, and copy.

John Hancock created the ShamRock Saturday campaign used a musical theme that included a self-mailer and promotional gifts branded with John Hancock name as a special weekend event. The judges of IFCA commended the creative theme, whimsical design and copy of the campaign, including its overall cohesiveness.

IFCA also awarded ‘Honorable Mentions’ for five other tools of John Hancock developed for producers. These tools have been

• Protection UL Promotional Mailer – This mailer highlights the new Protection UL and key strengths of the UL to producers.
• Brokerage Incentive Conference Invitation – This mailer is aimed at generating excitement among producers about the conference
• Treat Yourself to New Entrees in the Marketplace – This mailer is an ingenious method of introducing the trio of John Hancock products
• Client Navigator Brochure – This market brochure is designed to help advisors in identifying financial needs and relating them to present financial characteristics of clients
• Business Analyzer Microsite – This microsite assists business owners in finding right type of plans with easy navigation and nice design

According to a director of a life insurance, the train smashes up goes on and unluckily, whatever products were developed and whatever programs were put together; it won’t provide answers to the questions that people are looking for. Increase in premium is just the same old story every year according to Silverstein who is the CEO of Choice Employee Benefits in Williamsville. According to him insurance, being a community based product in the market is just becoming to be a burden to employers as well and not just to insurers and employees of the companies.

Insurance firms are not forced to make a decision and that is to drop down the cost of their coverage, make new plans that are affordable to the people and along with new plans, companies should also provide high amount of deductibles that will put a lot of burden to the employees. Conventional HMO companies or those that offer similar plans will look like dinosaurs in that case. But what insurance companies do is that they delay in providing health care to those who would like to get a new one.

“If companies will really take time out to lessen the expenses, they will just go over the plans where there is unluckily more of an out of the pocket cost to consumers” and that is according to Nick Siradas who is an account manager of a small insurance firm. Though, there are new premium rates, insurance companies are still finalizing the rates because under the law of the state, the insurer’s rate requests should be subjected to review by the state. Because only the state can approve them, lessen them and reject them so insurance companies cannot decide about it because the last say will come from the state. It was last year when the state lower down a lot of rate hike requests coming from different states in the US, though they weren’t able to mind about New York’s 3 carriers.

When PALIG completes the acquisition of the assets of MetLife in all jurisdictions, the total assets value that PALIG acquires would amount to nearly $675 million. The acquisition would cover 15 countries in the Caribbean and Central America. The revenues that the acquisition of assets represents would be more than $170 million, as of 2010.

President and CEO and Chairman of the Board of Pan-American Life Insurance Group, Jose S. Suquet, commented that the acquisition of assets of MetLife consolidates the strategy of PALIG to become a major health and life insurance providers in the entire Americas. He pointed out that PALIG has been providing trusted financial security for more than a century to its policyholders. The acquisition of MetLife assets builds on the financial strength of PALIG, apart from an expansion of geographic footprint and size of PALIC. The acquisition further reinforces the commitment of PALIG to serve customers in the entire Americas, he added.

The regions of MetLife that PALIG has acquired expand the international revenues of PALIG, making these markets a top priority, even as PALIG concentrates on expanding its global footprint.

Mr. Suquet stated that this transaction is in direct alignment with the dedicated focus of PALIG on core competencies of health and life insurance. The acquisition of MetLife business is part of the strategic focus of PALIG in becoming a major health and life insurance carrier having international reach. Suquet informed that this acquisition makes PALIG rank among the top three health and life insurance carriers in markets outside of the United States.

PALIG has become a partner of MAXIS Global Benefits in Panama, Costa Rica, the Caribbean, Ecuador, and Central America. MAXIS Global Benefits is a global network that MetLife and AXA have created for delivering optimal insurance coverage through own operations and other independent carriers to multinational companies.

PALIG did not disclose the terms of the transaction.

Timothy R. Schlatre now faces a possible imprisonment of not less than 30 years after the local attorney’s office found him guilty of committing the offence. Donald J. Cazayoux, who was the presiding attorney for the case, claimed that the accused entered into a conspiracy with six individuals in March last year to execute the deal which saw them make false claims for what they were not entitled to.

As part of their plan, the court heard, Schlatre compelled on the six individuals to come up with inflated figures of their monthly income and value of their total assets to authenticate their plan. On his part, the accused agent funded the six with cash to clear all their premiums, the action that went against the laid down rules and regulations of the local insurance industry. The attorney in his ruling said that Schlatre was wrong to deposit the money to the bank accounts of the six culprits since it was all meant to insinuate that a payment had been done.

The court found out that through his actions, Schlatre defrauded New York Life and Lincoln Insurance Company of more than $100 million which neither he or the co-accused were entitled to get. This attracted a fine of approximately $500, 000 or an alternative of suffering twice the loss he inflicted to the company. In addition to that, the court ruled that Schlatre may have to lose his vehicle which he unlawfully bought in 2007.

If convicted, the attorney is expected to claim full compensation for the insurance company from Schlatre as well as reimbursement for the damage caused by his actions. In their presentation during the hearing, the company claimed that it had suffered heavy losses since it had to make false payments in terms of commissions to Schlatre and his confidants. The insurer’s spokesman William Werfelman further noted that they fully cooperated with law enforcers by giving them all the details they wanted in their efforts to unearth the truth behind the scam and were more than happy that the truth finally prevailed.

The company has already terminated the employment of Schlatre and his contract revoked which effectively means he cannot represent them in any transactions.