Life insurers support National Insurance Act

Concerns that an optional federal charter would result in overlapping and conflicting regulation are ill-based ("Will optional federal charter lead to more regulation?" May 26).

Concerns that an optional federal charter would result in overlapping and conflicting regulation are ill-based (“Will optional federal charter lead to more regulation?” May 26).

If that were the case, neither Congress nor the life insurance industry would support such legislation. Indeed, recent studies concluded that companies and agents could realize annual savings of $5.7 billion and $377 million, respectively, under an OFC.

That is hardly the result of more regulation.

What insurers support is the National Insurance Act, which was introduced by Sens. Tim Johnson, D-S.D., and John Sununu, R-N.H., and Reps. Melissa Bean, D-Ill., and Ed Royce, R-Calif., and is legislation that would clearly define the lines of regulation. The legislation would create a streamlined regulatory system in which companies and agents could choose to be regulated by the states or a new federal regulator but not both.

This dual but exclusive structure would provide a modern and efficient regulatory environment that can better respond to the needs of consumers, agents and insurers.

Gary E. Hughes
Executive vice president
and general counsel
American Council of Life Insurers
Washington

Target date funds offer little customization

Despite all the hoopla surrounding custom target date funds, there is actually very little customization in these offerings.

Worst case, custom target date funds are merely packaging of defined contribution investment-only families of funds offered by a single investment management company.

These are closed-architecture packages made up solely of funds provided by a single investment firm, clearly designed for asset gathering rather than superior results. Best case, the custom fund is open architecture, but even then the glide path is usually licensed from a consulting firm.

Asset allocation is paramount, and this means that the glide path is critical. Cookie-cutter glide paths aren’t customized, and not all cookie cutters produce good cookies.

Of all the benefits that are commonly touted for custom target date funds, the only one that may stand up to scrutiny is lower fees, but this is certainly not always the case.

Let’s get these important offerings right and be honest about their descriptions.

Ron Surz
Principal
PPCA Inc. and TDA LLC
San Clemente, Calif.

Walking to work beats driving

I enjoyed the article in the June 9 issue, “Sky-high gas prices driving advisers to take new roads.”

Three years ago when I bought the property for my business in Shrewsbury, Mass., I figured that I would be here a long time. Having all my appointments at my office, we moved a mile and a half away.

I went from filling my gas tank every five days to every two to three weeks, depending on personal travel. I don’t walk every day, but it now takes me the same amount of time to walk to work as it did to drive to work.

I don’t really care about the cost savings, but wasting 30 minutes in a car each way and spilling toxins in the air wasn’t my cup of tea. I lost 10 pounds alone in my first year.

Christopher P. Provo
Chief executive and president
Provo Financial Services Inc.
Branch Manager
Jefferson Pilot Securities Corp.
Shrewsbury, Mass.