Article Abstract:
A review of the tax regulation of the insurance industry since 1959 improves the understanding of the positive effects of the Deficit Reduction Act of 1984, and of the threat of some current tax proposals by the Treasury Department. The Deficit Reduction Act of 1984 changed the system for computing a life insurance company's taxes payable, by eliminating the net level election and creating a new method for computing deductible reserves. While some of the revisions raised the tax burden for the insurance industry, new provisions reduce taxes in different ways (including granting new deductions for special and small life insurance firms). The Treasury Department proposals are unpopular with the insurance industry. The adverse impact of these proposals, should they be implemented, is described.
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Article Abstract:
Marketplace realities (such as increasing competition from financial service purveyors) have forced the insurance industry to create new products, especially in the area of life insurance. While consumers do not demand full service from insurance agents, they do require financial advice about term, whole, universal, and variable life insurance products. The innovative variable life product is discussed using the pioneering example of The Equitable Life Assurance Society of the United States. Traditional term insurance still holds advantages over the new interest-sensitive life policies, such as cost and short-term investment sense, and some of these products are reviewed. Rather than collapse under pressures of a changing environment, the insurance industry has adapted and grown.
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Article Abstract:
Through productivity improvement an insurance company can increase market share and profit, but this requires detailed knowledge related to cost control costs and achievement of long-term goals. The objectives of a systematic productivity analysis (or internal audit of productivity) are described, and the initial step (of collecting necessary data) is discussed. To evaluate the information, a number of analytical reports should be created: an activity priority report; a work distribution report; a work fragmentation report; a profile report; an organizational report; and a high to low activity report. Examples demonstrate how insurance companies can use these reports to improve productivity, enhance efficiency, and increase profit margins.
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