He speaks softly, so I can't make out his name, but he's from the life insurance side. (Update: The witness's name is F. James Ginnane of Planned Futures Financial Group, Williamsville, NY.) He's testifying on his own behalf and has no written statement. Says commission is only one portion of the premium cost and disclosure would add no value beyond what the consumer gets in the policy illustration. Consumer should focus on best value, not lowest commission. Compensation disclosure may divert buyer's attention from the important consideration -- what is the best value for the buyer. You have to walk a mile in our shoes to understand what business is like. Also, compensation disclosure may result in pressure from clients to illegally rebate commission.
Makes a good point: What about disclosure of compensation for employees of direct writers? "I don't have a problem with disclosing that I get paid for my work." Draws analogy between insurance commissions and the way travel agents used to get paid. Price of airline ticket was the same either way, but travel agent added value by offering advice and information.
Nachman: Are you saying that revealing too much information is harmful to the consumer? Witness: Why stop at commission amounts? Why not reveal insurance company's cost? Focus should be on insurance companies' expenses, of which commission is just one part.
Nachman: Could trips or other incentives impair your judgment? Witness: Yes, it could, but again this information diverts attention from the total cost of the policy. Nachman: It doesn't have to be the primary focus. Witness: Describes unlevel playing field regarding 401K sales as an example of of the wrong focus.
Brooks is asking about the trips he's won. Witness: "Not often enough." He's gone on a cruise to the Baltic and has a trip to Montreal next month. Brooks: How did you qualify for the trips? Witness: Based entirely on commission and premium produced. Brooks: How much was the trip worth? Witness: $6 - 7,000. Brooks: How did you qualify? Witness stated premium level. Brooks: Which carriers offer them? Witness: All of them.
Now they're grilling him about gifts he's received from carriers and office allowances. This is not going well.