Not everyone reads those annoying prospectuses that come from the companies with whom we invest our hard-earned money.
That’s the finding of a new survey from the Insured Retirement Institute, which found that 90% of consumers would be more likely to read their prospectus if it provided a short summary, rather than the full details of what their money is being used for. The survey also found that only half of consumers read the prospectuses currently provided with their investments, with only about 20% saying they always do.

More of us should be paying closer attention, given the downs and ups of the stock market in the last 18 months.

Companies should put their prospectuses in new media – a YouTube presentation, an iPhone app or a Wii game. That’s where our short attention spans look for important information, not in thick packets sent by snail mail.

Audra Szollosy, a VP at investment banking firm Hales & Co., wrote a good wrap up of insurance agency merger & acquisition activity in 2009 for Leader’s Edge magazine.  The article also included a list of big deals from last year, and discussed both retail and wholesale operations.

While Szollosy was a bit pessimistic about 2009, she holds some hope for the remainder of 2010, provided the economy moves in the right direction and Congress comes to some finality regarding health care reform.

Last week’s much-awaited episode of “The Office,” the NBC sitcom detailing the lives of workers at Dunder Mifflin Paper Co. in Scranton, Pa., took an easy, but at least humorous, shot at health insurance companies at a time when they seem fodder for all sorts of assaults. (I have delayed writing about it until now to give people who taped it for later viewing a chance to catch up.)

For much of the hour (Part 1 and Part 2), Pam, a Dunder Mifflin worker who was pregnant with the baby of her husband, Jim, another Dunder Mifflin employee, continued to work despite obviously needing to go to the hospital. She had contractions, getting progressively more painful and closer together. Her husband and others at the paper company tried to get her to consent to go to the hospital, but she declined, explaining early on that if she waited until midnight to go, she would get an “extra night” in the hospital.

As can only happen in sitcoms, Pam Halpert had the baby at the hospital and all was fine, but not before the insurance industry played the villain again, now to TV characters.

Thomas Currey, president of the National Association of Insurance and Financial Advisors (NAIFA), warns life insurance agents and financial service professionals that proposed legislation could change how they do business.

Specifically, he tells NAIFA members that the Senate Banking Committee is working on a financial services regulatory reform bill, which could mean that agents who offer annuities will have to make sure that the products they offer are the absolute “best,” and not just “suitable,” leaving the agents open to lawsuits and the interpretation of a judge or jury. More of this entry »

An Atlanta lawyer who deals mostly with commercial liability claims believes that insurance companies are selling the promise of protection, but in fact never intend to pay.

Writing on an IT security website, the attorney asserts that some firms have altered the insurer-insured relationship to one of adversaries, with the insurance companies vigorously fighting claims made by their customers. He says that what they promise — and what they actually deliver — are oftentimes in direct opposition to each other.

With today’s litigious atmosphere, and given the damages often paid by carriers, it is responsible for carriers to remain vigilant when paying claims.

But when an insurer acts in its own interest and not in the interest of its premium-paying clients, it goes against the basic fabric of fair play and fair business, as the attorney adequately describes it.

According to IFAwebnews, AIG will use part of the proceeds from the sale of its Asian life insurance business to repay the fed’s bailout funds, to the tune of at least $16 billion.

This comes after CEO Robert Benmosche said that AIG is on the right path, despite a loss last quarter.

Both appeared to be welcome news, as Wall Street responded warmly — at least, at first — according to Forbes.

The U.S. Senate allowed the National Flood Insurance Program to expire Feb. 28, and while the expiration is most likely temporary, the need for the program couldn’t have been more clear over the weekend.

Property owners along the Pacific Coast from Oregon to California were warned Feb. 27 that a tsunami, caused by the huge earthquake in Chile earlier that day, could hit the coastline, causing flooding. The damage to the Pacific Coast would have paled in comparison to forecasts for damage for Hawaii; those forecasts and the tsunami warnings they spawned were later withdrawn. Yet, the sudden possibility of a tsunami hitting the Pacific Coast of the U.S. shows how quickly the NFIP could become necessary.

No one last week would have predicted a tsunami to hit the U.S. Until then, everyone was talking about the crazy weather this winter, with snow falling in every states but Hawaii, record warm stretches and some intense cold. Flooding caused by melting snows is all but guaranteed in the Northeast in the coming weeks.

The unpredictability of nature, evident so clearly in the last week, explains why Congress needs to extend the NFIP, and not just to March 28, the date the U.S. House of Representatives’ bill before the Senate sets for its next expiration. Short-term fixes included in spending bills aren’t good enough.

Congress must resolve its uncertainty about the NFIP. Its expiration was extended four times alone in 2009. An editor here joked that every staff member at IFAwebnews.com has written an NFIP extension story. He is right and that is wrong.

Property owners need to know where they stand with the NFIP. If legislators don’t like the program, end it – and accept the consequences. Otherwise, extend it for three years. Anything less is silly.

Bob Graham, IFA’s executive editor, is LIVE BLOGGING the health care summit in Washington, D.C.

In addition, all Twitter “tweets” associated with the summit appear alongside the blog.

Viewers can have real-time updates in both blog and tweet at this link:

http://ifawebnews.com/2010/02/25/the-president%E2%80%99s-health-summit/

IFAwebnews.com will be posting updates and observations throughout the President’s Health Summit Feb. 25, where President Obama and key members of Congress, both Democratic and Republican, are supposed to hammer out a plan for comprehensive federal health care reform. For a recap, click on the More button below.

More of this entry »

According to an article on IFAwebnews.com, many investors are opting for EFTs and bypassing the traditional financial advisor relationship.

Besides Charles Schwab mentioned in the article, Legg Mason filed an applicaion with the SEC to launch actively managed exchange-traded funds, as reported by the Baltimore Sun.

Fellow Baltimore firm T. Rowe Price also has filed an application, as John Hancock and PIMCO are also reportedly planning to introduce an EFT.

The jury is still out on how this might affect advisors, but when savvy investors can bypass those who have handled their portfolios, that can’t be good news.