Re: Re: world financial group div. of Aegon,N.V.

Subject: Re: Re: Re: world financial group div. of Aegon,N.V.

Comments:
: 5. WRL VUL Insurance Misrepresentations: : Submit any sales illustrations to http://www.consumerfed.org/rorflyer.pdf. Actuary James Hunt of the Consumer Federation of America will evaluate the truth of the claims for a nominal fee of $45. Mr. Hunt is also former Insurance Commissioner of Vermont. The CFA also has links to publications and press releases, some of which are available for download as pdf files: : http://www.consumerfed.org/publist.html : http://www.consumerfed.org/releases.html : An actuary is a mathematician who is specialized in insurance, benefits analysis, etc., and must pass a series of rigorous mathematical examinations in order to earn the designation(http://www.soa.org). The designation stands far above any other in insurance and finance: the securities and insurance examinations required for insurance salesmen are notorious for their lack of a sufficient statistical upper ceiling. You might wish to read a brief description of a brochure published by Mr. Hunt and the CFA(http://www.consumerfed.org/insurance.pdf). Mr. Hunt published “An Analysis of Cash Value Life Insurance Policies,” which is a study of 109 whole-life and universal-life policies using the same Linton-Yield method of rate-of-return estimation. : The Western Reserve Life VUL(variable universal life insurance) policies are heavily promoted by the WMA because it provides high commissions and fees. Beware of any claims indicating that this is a better use of your money than buying term life insurance and investing the difference in mutual funds placed in an IRA. The buy term and invest the difference(BTID) strategy is precisely what WMA founder Hubert Humphrey(CRD No. 857054) advocated to customers when he was Vice President at A.L. Williams(see: http://www.mlmlaw.com/library/cases/mlm/feddistrict/alkelly.htm, paragraph 7). Now he advocates the exact opposite. Your challenge as a consumer is determining in which of the 2 instances he actually might have been telling the truth. The WMA has had a reinsurance agreement with WRL(also with American Skandia and Kemper) whereby the companies shared in commissions and fees, including the surrender fees paid by recruits(et al.,) who defaulted(lapsed) on the policies because they obviously couldn’t afford them. : If it is a matter of your word against a WMA/WFG agent in a sale where the product was fraudulently misrepresent to you, make certain to check the agent’s criminal and complaint background on his NASD CRD record resume, and insist upon being administered a joint polygraph examination with the agent(and any other applicable parties). If the WMA/WFG or WRL claims to have conducted an “investigation” of your claim(which will likely show “no wrongdoing” on their part), insist(subpoena) all logs and records indicating the date, time, manner, and place of said investigation. Officers in the WMA Compliance Department, WRL Compliance Department, and WFG Legal Counsel have made willful false statements regarding such investigations in the past.I have challenged WMA/WFG CEO Hubert Humphrey, WMA Securities President Barry Clause, the entire WMA “Compliance” Department, and the WFG/WMA Legal Counsel staff to a joint public polygraph examination numerous times during the past 11 months, including by certified letter to WMAS President Clause, which they refuse. One condition is that law enforcement authorities, securities regulators, and members of the financial press be present during the sessions: The WMA’s legal strategy is to continue to lie, refuse to respond, and obfuscate as long as possible, while trying to pocket as much money from the pyramid scheme and fraudulent sales as possible in the immediate short term. : Numerous founders and early members of the WMA pyramid are former A.L. Williams(now Primerica) agents, and some, including Humphrey still report concurrent ALW/Primerica employment, indicating that they ultimately derive income from sets of customers(not necessarily mutually exclusive)who receive precisely the opposite insurance/financial advice. This is clearly unethical and fraudulent. To date, I have been able to obtain the CRD records of 25 of the 27 WMA employees who were featured speakers at the WMA 2000 Millennium Convention. They were listed on the WMA web-site (http://www.wmas.com/events/2000MillConv/00_2851.htm) directly under the heading “All-century Team All-Stars Why I a succeeding in WMA”. : (a) The mean reported time of employment with the WMA was 7.29 years(note that starting dates with Alexander, Inc. were used for 4 employees - according to Money, Alexander, Inc. is the name of the pyramid Humphrey brought with him from Primerica). : (b) Sixty percent of these speakers reported having worked for A.L. Williams or Primerica: note that the employment need not fall within the scope of the 10-year NASD reporting requirement(the WMA was formed in 1991). : (c) If one includes work at Intersecurities (which according to the 1998 WRL Series Fund prospectus, is the Fund distributor), the number increases to 80%(I will provide a list of such members upon request). A number of individuals worked 1-2 years at Intersecurities in the interim between Primerica and WMA employment. : (d) At least 20% of the speakers have been reported for some sort of impropriety such as VUL misrepresentation. : (e) At least one had declared bankruptcy after joining the WMA. : According to Money(May 2000), the average annual VUL premium for policies sold through the WMA is $1,850. This is lower than the maximum annual contribution to an IRA account(traditional or Roth). Since Money reported that the WMA claims to specifically target persons who do not already have investment accounts, these individuals likely could have placed the total premium amount within a tax-protected IRA. : Look at the example chosen by the Western Reserve Life(WRL) actuaries to illustrate the benefits of the Prospectuses for WRL Financial Freedom Builder Individual Flexible Premium Variable Life Insurance Policy and WRL Series Fund, Inc.(I received the 1998 prospectus as a solicitation to join the WMA and buy the VUL). A 35-year-old male nonsmoker paying a $2,000 annual premium receives a death benefit of $165,000. At age 65(retirement), the cash value in the account(assuming the maximum allowable gross interest rate of 12% for such projections) would be $287,206(WRL Series Fund Prospectus, page 45). One reason is that the subaccount-mortality and portfolio-operating fees reduce the interest rate 1.85% the first 15 years, and 1.70% the last 16(if you even believe their claim that the fee might be reduced). : Even if you purchased the same expensive insurance, simply investing in the mutual funds directly without the WRL's pickpocket interest fees would yield a cash value of $430,775. Using a price quoted for the same 35-year-old non-smoker category from Zurich Direct (January 1999), and adjusting the price downward to reflect the $165,000 death-benefit coverage, buying term and investing the difference directly into the same mutual funds would yield a 30-year cash value of $505,198. : The WRL actuaries chose to illustrate Option A only. In Option A, if you die, your heirs receive either the death benefit or the cash value, but not both(whichever is greater). The cash value is multiplied by a limitation percentage(page 15 of the Prospectus). Even if you did receive both, imagine you died at age 65. The total of the WRL $165,000 death benefit + the WRL cash value of $287,206 = 452,206, which is less than the total cash value of the alternative cash value of $505,198 not even including the $165,000 death benefit($505,198 + $165,000 = $670,198). Under the WRL plan, the heirs of the insured would actually receive only $338.577. : The actuaries chose not even to illustrate Option B, which allows one to receive both the death benefit plus the cash value(times the limitation percentage) because the premiums must be increased proportionally to the coverage, which will significantly lower the cash value of $287,206 calculated for Option A. Similarly, the WRL Freedom Elite VUL has mortality fees which reduce the earned interest rate by 0.90% and portfolio subaccount fees ranging from 0.44% to 1.20%. The total reduction, therefore would range between 1.34% and 2.10% depending on the choice of subaccounts. Again, this interest-rate reduction would lead to an enormous reduction in customer cash value when compounded over a long time, e.g., 30 years to retirement. : The variable annuity(VA) which is the subject of a current class-action suit against the WMA, WRL, and AEGON(http://biz.yahoo.com/bw/011022/221048_1.html), would have actually reduced the customer’s/victim’s cash value by more than 50% when projected 33 years to retirement age at the maximum legal rate(for projections) of 12%, simply due to mortality and portfolio fees. In spite of the obvious fraud of the case, and violation of probably ever provision of NASD 99-35 regarding the suitability of annuities(http://www.nasdr.com/pdf-text/9935ntm.txt) and numerous misrepresentations..., the WMA Compliance Department, the WRL Compliance Department, and WMA Securities President Barry Clause absolutely refused to refund the victim’s money without exacting surrender charges. Anybody who has been cheated by the WMA/WRL through a retail purchase of a variable product(variable annuity or variable universal life insurance) might want to contact the attorneys involved in the aforementioned litigation. It is unlikely that anybody would buy any of the WRL variable products I have examined without its being misrepresented to them. : John Raymond Kenney(CRD No. 267984), listed as The WRL CEO in the 1998 prospectus, has been fined and censured by regulators for what appears to be insider trading. WMA Securities President Barry Milton Clause(CRD No. 1100029) has been fined and censured by regulators, and was specifically cited in 3 regulatory actions taken against his former firm Primerica, where he served as Compliance Director. Clause has also been known to suffer from Truth Deficit Disorder, as witnessed by his sworn deposition testimony in the Tuttle v. A.L. Williams case(Dallas [US] District Courts case 83-02089-L), i.e., he was caught lying in sworn testimony in federal court). : If a WMA agent tells you that purchasing a VUL(or any type of cash-value insurance policy) is an investment or a retirement plan, he is guilty of “investment misrepresentation,” and he should be reported to your state department of insurance(see: http://www.naic.org/1regulator/usamap.htm). If he uses the “vanishing premiums” misrepresentation, also report him, as this is also the subject of current litigation. : 6. Insure Only against the Catastrophic: : If you have no dependents who would suffer catastrophic economic loss upon your death(e.g., inability to continue mortgage payments on your house), you probably don't even need life insurance. The WMA has been known to aggressively market policies to single persons, in good health, with no dependents, and no substantial tangible property. This is an out-and-out swindle. : If you didn't need life insurance, investing the $2,000 annually into an IRA would yield a 30-year cash value of $593,304.

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