Click to edit master lead-in head Strength through Innovation Karen Sweeney, Chief Financial...

click to edit master lead-in head

Strength through Innovation

Karen Sweeney, Chief Financial Underwriter

Kathy Fell, VP & Head of AXA’s Brokerage Underwriting

AXA Equitable’s Underwriting

Meets AgencyONE

Cat.# 144773 (2/13) For Financial Professional Use Only. Not for use with the general public.

click to edit master lead-in headagenda – financial due diligence

strength through innovation

Drag picture to placeholder or click icon to addDrag picture to placeholder or click icon to add

• Who We Are

• What We Do

• How We Add Value

• How YOU can help US

For Financial Professional Use Only. Not for use with the general public.2

click to edit master lead-in headabove all else, we need to be good with numbers

some simple mental calisthenics to start our session

click to edit master lead-in headdoes anyone have…

18

Click to edit master text style

five financial experts with over 75 years of combined insurance experience

• Develop financial solutions for complicated or unique case designs such as Premium financing and trust-owned coverage

• Utilize their accomplished investigative skills to access public records and Internet databases

• Assist with in-house reviews that validate submitted financials which may eliminate the need for additional financial requirements


who we are


For Financial Professional Use Only. Not for use with the general public6

team structure

Mary Bates,Head of Life Underwriting

Michael Tunney,Head of

Financial Due Diligence

Karen SweeneyChief Financial Underwriter

Anna NapoliAssistant Manager

Tabatha Johnson, C.P.A.Chief Financial Underwriter

Mark BishopLegal Assistant


• “mature” unit embedded within the Underwriting area to provide guidance regarding case designs, client information, EOLI issues

• backgrounds include:

Life Underwriting Experience

Certified Public Accountant

Certified Fraud Examiner

Claims Adjudication

Paralegals

• work in concert with Underwriting Management and Advanced Markets to ensure underwriters have information at their disposal to best assess the cases presented to them

more on who we are – AXA Equitable’s unique position



• additional resource for underwriters to better understand issues that are driving the sale of the policy

• sounding board for underwriters to discuss items of concern they have identified

• identify trends in financial underwriting issues, and provide additional training and education to help underwriters better understand the financial presentation of the application

• verify financial presentation is accurate

: allow our Underwriters to spend their time assessing risk

what we do - ultimate role



• getting to “YES”

• determining premium paying ability

• estimating net worth

• legacy planning – thinking about future generations

• key components for faster track


line: allow our Underwriters to spend their

putting theory into action


click to edit master lead-in headcase study #1 - things aren’t always what they seem


Founder and CEO of commodities trading company

States annual income is $1,000,000+

Business Tax Returns, page 1, suggest significant losses

How does the AXA Underwriter navigate through this presentation?

Female, age 49, non-smoker

Applying for $30 million, 10 year term policy

Purpose of insurance: key person and buy-sell

click to edit master lead-in headfirst glance – 2010




click to edit master lead-in headsecond glance – 2011




click to edit master lead-in headthe first clue – income had to be somewhere




click to edit master lead-in headthe second clue – balance sheet and partners’ capital accounts







• Schedule K-1

did not receive any portion of the Guaranteed Payment to Partners

received distributions of nearly $3.2 million in 2011

net capital account totaled over $11 million

additional financial statements showed an additional, wholly owned subsidiary that contributed both annual income and increased equity

Result: Financial Due Diligence communicated a comfort level for face amount applied for to the underwriter

the deep dive


click to edit master lead-in headcase study #2 – finding the money


Proposed Insured’s net worth: $52 million

Annual Income: $1,125,000

Premiums: nearly $670,000 first year; subsequent premiums nearly $300,000 annually

Male, age 52, non-smoker

Applying for $25 million IUL

Purpose of insurance: family protection, income replacement and estate planning

Occupation: self-employed real estate development and management

In Force Coverage: $9,116,000 (not replacing)

click to edit master lead-in headthe financial questionnaire




click to edit master lead-in headthe tax return




click to edit master lead-in headputting the puzzle together


Financial Due Diligence used the tax returns as a resource to develop names of business entities through which real estate would be owned by the proposed insured

Financial Due Diligence subsequently verifies extensive real estate holdings owned in various LLC names via public information

consumer debt of $2,600,000 all paid currently and without history of credit delinquency suggests income well in excess of what the tax returns reflect

supporting Schedule K-1s show significant cash flows from business entity distributions and significant partner capital account balances

Result: annual income and net worth as reported on the financial questionnaire appear reasonable; concern regarding premium affordability addressed


Two options:

Option A: 1040 tax return

estimating net worth


click to edit master lead-in headestimating net worth of investment accounts





Option B: Use of 4506 - T

option b: 4506 - T



Wages and investment assets

estimating net worth with the 4506 - T



Business Interests

estimating net worth with the 4506 - T


click to edit master lead-in headprojected inheritance – financial due diligence role


Guidelines:

• Generation 1 (G1) must be: a) age 70 or older, or b) under age 70 with evidence of a life expectancy under 5 years

• Require confirmation that established estate planning is in place that involves transfer of estate to the next generation

• Verification of net worth of G1• An appreciation factor may be considered on a case-by-case basis

(possible 3-5% for max period of 10 years), subject to the structure of the inheritance planning, details of assets to be inherited (value and type of asset), and review by the Financial Due Diligence Team

projected inheritance

1+1 = 2Turn 1 sale into 2 (or more!)

AXA Equitable now financially underwrites cases based on the projected inheritance of the Insured

The assets of one generation can justify life insurance coverage for the next

important


what is required to confirm established estate plan is in place

• can be in the form of:

a copy of the Irrevocable Trust, if one has been executed

confirmation (from attorney or some appropriate third party, not the Proposed Insured) verifying Inheritance to take place in the next 5-10 years; or

a copy of Parent's or Bequeather's Will and Estate Planning documentation

confirmation guidelines

GE-0000026

click to edit master lead-in headfinancial case study – projected inheritance


Proposed Insured’s individual net worth, exclusive of future inheritance, is $20 million

Mortality calculation at the Proposed Insured’s age 45, would qualify for a total line of $43 million

Bequeather/mother’s net worth is $28 million

Mortality calculation at mother’s age 75 qualifies for $27 million which represents son’s possible estate tax liability

Male, age 45, non-smoker

Applying for $65 million IUL (AXA’s Jumbo Limit)

Purpose of insurance, estate planning, Sole heir to his 75-year old mother’s estate

Beneficiary is an Irrevocable Life Insurance Trust for the Benefit of the Proposed Insured’s Children, Grantor Mother

click to edit master lead-in headfinancial case study – projected inheritance


the solution:

By adding the current projected death benefit need of the Proposed Insured and the projected future inheritance from the mother’s projected estate need, AXA was able to justify the amount applied for: $65 million

Our competition would have allowed only $40 million


value of anticipation, partnership, and communication

• cover letters

• secure complete financial information

• review finances prior to submission to determine if complete financial picture is being presented

• secure additional financial Info if it will be required

If large % of Net Worth is in Real Estate, secure addresses

If large % of Net Worth is in Oil/Gas Royalties, secure valuation information, last royalty check, 1040s, etc.

• include financial information with Informal Review Process

moving things along…faster track

GE-0000029

click to edit master lead-in headagenda

strength through innovation

Drag picture to placeholder or click icon to addDrag picture to placeholder or click icon to add

• Who We Are

• Special Programs

• Underwriting Niches

• Marketing Resources


click to edit master lead-in headAXA Equitable’s most competitive strength


who we are


our underwriting teams

• 80+ Underwriters; average of 20+ years experience

• Expertise in navigating the grey by taking a holistic

approach to underwriting each case

• Understand the competitive nature of the business

• Options oriented; solutions driven

• Dedicated to building and maintaining relationships

our workflows

• Maximize our strong experienced staff, with easy and

direct access by phone or email


who we are — underwriting teams

Large Case

“Concierge Service” and expert case design

General

Dedicated Relationship Management for a tailored response to individual agency needs


four medical directors, combined at three sites, with a total of over 40 years experience

• Committed to research and development of new medical

updates keeping our guidance cutting edge

• All are Insurance Medicine Board Certified each with

unique focus and experience

• Provide holistic training and educational opportunities

both internally and externally


who we are


AXA Equitable retention and automatic limits(standard or better risks – in millions)

1 Lower limits apply to juvenile insurance2 For policies with increasing amounts, i.e., policies with Return of Premium Death Benefit Rider (ROPR), the ultimate amount per the

illustration must be used for retention and automatic reinsurance calculations.3 For ASUL products, death benefit is limited to our retention.

underwriting programs

34

1 3

For Financial Professional Use Only. Not for use with the general public.

• Large Retention Capacity

• Strong Reinsurance Relationships

Highlights: 2

click to edit master lead-in headunderwriting programs


predictive analytics “EasyUnderwriting” programAXA is piloting a new underwriting process that uses technology to analyze information application information.

This data helps determine the underwriting rate class and opportunity for potential “Jet Issue”

Benefits:

Faster cycle time for cases that meet predefined criteria

Underwriting decisions, on average are made within 3 business days

Cases that fit criteria do not require exams and labs

An easy, enhanced customer experience

Please contact your Underwriter or RVP for further details.

important



good health credit program (GHCP)Giving credit where credit is due!

Can a Proposed Insured with a demonstrated healthy lifestyle get credits

to improve his or her overall rating? YES!

In fact, eligible Standard cases can move to better than Standard rates.

Factors considered include:

Favorable cardiovascular risk factors

Good preventative medical care

Lifestyle changes and improved health habits



good health credit program

Unlike traditional limiting industry table shave programs, AXA

Equitable’ s GHCP allows credits for:

All Products

Face amount limits — up to available full retention:

$20 million individual or $25 million survivorship

Both lives on a survivorship policy

Cases rated up to Table D


professional athletes, entertainers and high profile individuals


underwriting niches and advantages

All Term and Permanent

Full Retention

Regular Schedule

N/A

None

PRODUCTS

RETENTION

COMPENSATION

TEAM LIMITS

REINSURANCE

Personally-Owned

10-Year Level Term and ART

Full Retention

Levelized Schedule

No Limit

None

Business/Team-Owned




preferred classification available with personal history of cancer

Better than Standard offers can be considered on a case-by-case basis for some cancers with very favorable prognosis.

This would include:

Melanoma-in-situ (Clark’s level 1 melanoma), without history of dysplastic nevi

Papillary or mixed (papillary-follicular) carcinoma of thyroid

Testicular seminoma

Carcinoma-in-situ or CIN/dysplasia of cervix

Carcinoma-in-situ of colon, without subsequent adenomatous polyps




favorable factors for consideration of better than standard with personal history of cancer

Non-smoker

Early stage and early grade of tumor (in situ or stage I) at time of diagnosis and treatment

Surgical treatment only (no radiation or chemotherapy)

Current age 50 and up

10 or more years since cure of cancer

Excellent follow-up and routine preventive health care


prostate cancer

• Early stage, low grade prostate cancers in older

males are often Standard

• At ages 60 and up, non-apical, organ confined

disease, Gleason 8 and lower, treated by

prostatectomy, with favorable PSA’s for 5 years -

may qualify for Standard!

• Age 66 and up, even with a PSA rise, AXA can

offer on selected cases of biochemical relapse of

Prostate Cancer



New!

Transient increases of PSA that return to acceptable ranges on their own without any form of treatment will not be considered a relapse


Male, age 69

IUL, $3 million

No coverage in force or applied for

Prostatectomy at age 62 for adenocarcinoma of the prostate, Gleason score 7

Pre-surgery PSA (8)

Annual follow-ups with PSA values <(0.1)

18 months ago, PSA rose to (0.2). At six-month recheck PSA was (0.3).

With no further intervention, PSA dropped back to (0.1) one year ago

Insurance blood profile PSA is stable at (0.1)

Otherwise healthy individual taking no medications, normal blood pressures, lipids and family history.

medical case study — prostate cancer


AXA offers Standard

click to edit master lead-in headunderwriting niches and advantages


MGUSMonoclonal Gammopathy of Undetermined Significance is a condition in which a paraprotein (IgG, IgM and IgA ) is elevated in the blood.

Occurs in 5% of those over age 70

AXA’s ability to provide more favorable offers has improved

All cases of Multiple Myeloma are preceded by MGUS, but not all cases of MGUS will progress to Multiple Myeloma

important

Lower identified risk factors result in lower ratings!


Face Amount—$2,500,000, UL

Male age 66, Non-smoker

Otherwise healthy individual taking no medications, normal blood pressures, lipids and family history

Diagnosed with MGUS a year ago when visiting his MD for a routine physical, he has remained asymptomatic.

Extensive lab work included:

Serum M-protein level < 3g/dl All IgG, IgM and IgA levels within acceptable ranges

Bone marrow plasma cells were < 10%

All IgG, IgM and IgA levels within acceptable ranges

Bone marrow plasma cells were < 10%

Urine M-protein < 1gm/day

Physical exam favorable with absence of organ or tissue impairment related to myeloma

medical case study - MGUS


click to edit master lead-in headmedical case study — MGUS


AXA offers Standard w/Flat Extra $2.00/1000

Due to recent Medical Manual updates, AXA was able to give this client the most favorable rating of Standard with a Flat Extra of $2.00 per thousand. Prior to AXA’s MD Research and Manual updates, the Flat Extra could have been as high as $7.00 per thousand.


46

rheumatoid arthritis Rheumatoid Arthritis (RA) is an autoimmune form of arthritis that causes pain, swelling, stiffness and loss of function in the joints. Can also affect eyes, mouth and lungs.

Favorable cases are those in remission for more than 1 year, could now be Standard and eligible for Standard Plus via the Good Health Credit Program

Will still consider someone on medication for better than standard if they meet all ACR Criteria

Use of disease modifying Anti-Rheumatic drugs no longer considered an adverse factor in treatment of RA, leading to more aggressive offers.

Lower identified risk factors result in lower ratings!



Face amount: $5,000,000, IUL — Female, age 49, Nonsmoker

Rheumatoid arthritis, diagnosed at age 46. Past treatment for

depression, no longer on RX.

2009-Minimal joint pain in hands and feet, no morning stiffness or swelling, started Methotrexate

2010-significant discomfort in left ankle. Rx Enbrel and Prednisone taper (10 mg/day for 3 days, then drop to 5 mg/day for 3 days, then discontinue)

2011-RA stable, no joint swelling, no pain other than shoulders, but appears to be due to muscle strain, not RA.

2012- still taking Enbrel and Methotrexate, no swelling, no morning stiffness, no joint pain

Satisfies all ACR criteria for remission for over 1 year. No additional debits for current or past medication usage Good Health Credits available for Cholesterol, No tobacco usage, Family History, Build, Blood Pressure, regular follow-up with MD.

medical case study - rheumatoid arthritis


click to edit master lead-in headmedical case study — rheumatoid arthritis


AXA offers Standard Plus

Rheumatoid Arthritis in remission, even while on

maintenance medications, including multiple Disease

Modifying Anti-Rheumatic Drugs can qualify for better

than Standard rates.



EBCT results

AXA looks at the whole case giving credit for favorable routine care and

control of blood pressure and cholesterol and other coronary risk factors:

Percentile 0 – 74: all Preferred levels available

Percentile 75 – 89: can consider for Preferred or Standard Plus with normal

imaging stress test, favorable risk factors, etc.

Percentile 90+: Standard is best offer, with normal imaging stress test,

favorable risk factors, etc.

important

A cardiac catheterization report remains the gold standardif done as part of the cardiac workup


Face Amount: $5,000,000, VUL

Male age 65, Nonsmoker

Treated Hyperlipidemia, Cholesterol ratio 4.5

Blood Pressure 120/80

EBCT score of 70th percentile

All other risk factors favorable

medical case study - EBCT


AXA offers Preferred Elite



sleep apnea

Sleep Apnea is a sleep disorder characterized by abnormal pauses in breathing or instances of abnormally low breathing during sleep.

All Preferred classes are available with mild sleep apnea (AHI less than 20, O2 saturation > 85%)

All Preferred classes available on cases treated with effective CPAP therapy, with demonstrated compliance



barrett’s esophagus

Usually related to Chronic GERD. Treatment: Gastric suppression with proton pump inhibitor (PPI)

Complications: Low grade dysplasia

High-grade dysplasia

Esophageal adenocarcinoma

Higher incidence in males than females. Over age 45 is highest risk group.

More cases can qualify for Standard and upgrade to Standard Plus via the Good Health Credit Program

Resolution on endoscopy or biopsy may qualify for better offers


Male age 55, 5’10”, 200 lbs.

Quit smoking 18 years ago

$6,000,000, VUL and Term 20 coverage

Family History: Father alive - age 77,

Mother died at 71 of colon cancer

Treated Hyperlipidemia, Cholesterol ratio 3.5

Blood Pressure 120/80

All other risk factors favorable

Referred to gastroenterologist 3 years ago with worsening reflux symptoms not relieved by medication. An endoscopy was performed revealing Barrett’s Esophagus with no dysplasia.

Follow up endoscopy this year confirmed Barrett’s Esophagus with no dysplasia

medical case study – barrett’s esophagus


AXA offers Standard Plus



bariatric surgerySignificant, sustained weight loss over 2 years.

Look for improvement in:

hypertension

diabetes

diet and exercise

important

Cases can be considered for all levels of Preferred after two years based on the merit of the improvement, stability of the treatment, and its effects on all associated impairments



aviationAXA Equitable offers Private Pilots the opportunity to qualify for all Preferred Classes for risks evaluated up to $3.50/1000 for their aviation activities

Licensed private pilots with 100 or more solo hours and flying between 26 and 150 hours a year incur no extra premium assessment

important

Cases can be considered for all levels of Preferred with 100 or more solo hours and flying between 26 and 150 hours a year

click to edit master lead-in headAXA Equitable


what sets AXA apart?Here is what sets us apart from the competition…

important

marketing support

high retention

GHCP credit program

underwriting expertise

financial team

medical directors

click to edit master lead-in headunderwriting marketing support


Underwriting Case Studies

Marketing Flyerswww.axa-equitable.com

My Business > Underwriting

podcasts

Brainsharks

underwriting campaigns

thank you

Please visit www.axa-equitable.com for more information

58 G30859For Financial Professional Use Only. Not for use with the general public.

This seminar is for informational uses only

All guarantees are based on the claims-paying ability of AXA Equitable.

This material should not be considered tax or legal advice. Clients should

consult their own tax and legal advisors regarding their particular

circumstances.

© 2013 AXA Equitable Life Insurance Company. All rights reserved.

1290 Avenue of the Americas, New York, NY 10104, (212) 554-1234.

59

disclosure


Click to edit master lead-in head Strength through Innovation Karen Sweeney, Chief Financial...

Documents

Transcript of Click to edit master lead-in head Strength through Innovation Karen Sweeney, Chief Financial...