NAIFA MEMPHIS. The Racquet Club of Memphis

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1 NAIFA MEMPHIS The agent advocate Volume XVIII September Officers and Board of Directors President Thomas Dubose Immediate Past President Chris LeBlanc, CLU President-Elect Walker Wellford,III,CLU Secretary / Treasurer Jim Smith, AAMS jesmith@jhnetwork.com State / National Committeeman Rick Pittman, CFP, CLU rpittman@investorscapital.com Directors Eugene Hinders ehinders@metlife.com Kathy Thurmond-Edwards Kathy.thurmond-edwards.cu69@statefarm.com Shannon Shriver, LUTCF, CRPS, CLTC skshriver@ftnyl.com Association Executive Lisa Loden naifamemphis@naifamemphis.org Tuesday - September 21, 2010 The Racquet Club of Memphis Tom Currey, CLU, ChFC, LUTCF Buffet Line 11:30 Meeting Begins 12:00 Everyone has a story. Tom Currey s story is about dual careers as a musician and a life insurance agent/advisor. Tom also has a personal story about the value of life insurance the important role it played in his life. And it s the story of NAIFA value from our founding in 1890 right up to the current moment. Whether it is insurance and financial services or NAIFA membership Tom believes a good story helps in the sale. And everyone knows, a good story has A Beginning, A Middle and An End. Thomas D. Currey, CLU, ChFC, LUTCF is the owner of TDC Financial Services in Grand Prairie, Texas. His 30 year career in the financial services industry provides him with a wide range of experience in selling, training and recruiting. He served as president of NAIFA-Great Southwest, receiving the Career Achievement Award in 1995, and as president and national committeeman of NAIFA Texas. In 2002, he received the Texas Leaders Round Table Outstanding Achievement Award. He served as an original member and chairman of the NAIFA Leadership Development Task Force, as a member of the NAIFA Transformation Task Force, and as chair of the NAIFA Committee on Associations. He led development and implementation of the NAIFA Leadership in Life Institute. Elected NAIFA trustee in 2004, he served as liaison to the Association Executives Council and APIC. As NAIFA President-elect Tom chaired the 2009 National Leadership Conference and the NAIFA Convention and Career Conference. He became NAIFA President on September 16, 2009 Currey is a member of the Dallas and Fort Worth Estate Planning Councils, SFSP, the Golden Key Society and AHIA. He is also an IFAPAC Capitol Club contributor and a PIC contact. He and Charlotte, his wife of 37 years, have four sons and one grandson Scheduled Meetings The Racquet Club of Memphis Doors 11:30 am September 21, 2010 Speaker: Tom Currey October 5, 2010 Golf Tournament October 26, 2010 **December 2, 2010 NAIFA Memphis 100 yr Celebration January 18, 2011 March 22, 2011 April 26, 2011 PLEASE MAKE RESERVATIONS BY NOON SEPTEMBER 17TH, FOR THE SEPTEMBER 21ST MEETING naifamemphis@naifamemphis.org Phone: Buffet line 11:30 a.m. Meeting 12:00 p.m NAIFA Memphis Golf Tournament Memphis National October 5, 2010 Registration 11:45 Shotgun Start 1:00

2 Thomas Dubose, LUTCF, CLTC NAIFA Memphis President Happy 100th Birthday NAIFA Memphis! President's Message On January 3rd, 2010, we began our 100 year celebration as an association. What a great history our association has here in Memphis, as so many industry leaders have come from within our ranks. Thanks to that leadership, we all still enjoy careers in the life insurance industry today. As we near the end of the year and I begin as your President, I would like to conclude this historic year with a BANG. Our board is in the process of planning a year end celebration in December. We look forward to seeing all of you there. As our economy slowly recovers, you may be considering, Why NAIFA and Why Now. I would like to name just a few of the benefits we all receive as NAIFA members. First and foremost, consider membership as career insurance. If for no other reason, everyone earning an income from products and services from our industry needs to be a member, and should consider their dues, career insurance. The advocacy we receive at the national and state level regarding proposed legislation is simply invaluable. Now more than ever this advocacy is crucial. Second, quality luncheon programs we have put together a slate of speakers with industry-related topics to help you grow your practice. Third, information and educational opportunities... NAIFA GovTalk provides you with updates of pertinent legislative information. The WebCast educational events and the monthly Advisor Today publication both provide timely educational opportunities and industry information. NAIFA Memphis is committed to continue its practice of offering members 12 hours of CE annually, which will satisfy your CE requirements for Tennessee. NAIFA.ORG Virtual Library... If you have not taken time to go online and see what is available to you with your membership, please do so. Virtual Library is an online comprehensive resource for every stage of your career, offering free access to client presentations, tax tables, specimen documents and various sale concepts. Fourth, YAT... the Young Advisors Team the purpose of YAT is to sow the value of membership with young and new advisors, to help them survive and be successful.

3 This is just a brief overview of what NAIFA is doing for you. Now, what can you do for NAIFA? First, stay informed by signing up for GovTalk from NAIFA, so you can receive up-to-date information on critical issues as they relate to our industry. To sign up for GovTalk and GovAlert, log in to using your member number which can be found on the mailing label of your monthly Advisor Today, just above your name, or on your membership card. Your password is your last name. Then you will be given the option to subscribe. Simply follow the directions, and you will start to receive information vital to you as it pertains to our profession. Second, talk to a non-member about the benefits of being a member, and ask them to join. I should not have to tell anyone of the attacks our industry is being bombarded with in the coming year. We all are part of the membership team. Ask someone. Third, support IFAPAC NAIFA membership is the cornerstone of what you can do to help advocate our industry s position, but IFAPAC is needed so money can actually go to support political candidates who are willing to listen to us. Fourth, consider volunteering just 2 hours a month to help the board with committee work. There is tremendous strength in numbers, and we need your help. Please call me to volunteer. As we reflect on our 100th year, ask yourself, is it my time to give back to our industry? Your support may be needed more this year than ever before. We can all give a little, and that is exactly what I ask of each of you, just a little effort to make our association better for us all. Kindly, Thomas Dubose, LUTCF, CLTC

4 Summary of the New Financial Reform Law The financial reform bill recently signed into law is an attempt to address some of the problems that contributed to the 2008 financial crisis. The legislation, officially known as the Dodd-Frank Wall Street Reform and Consumer Protection Act, is considered the most wide-ranging overhaul of the U.S. financial system since the aftermath of the Great Depression. Because the problems it addresses are complex, the legislation itself is complex; much of the real impact will be felt only after regulations are developed to implement the law's provisions. Also, some provisions, such as those dealing with lending practices, will have a direct impact on individuals and investors; others will primarily affect the ways in which Wall Street functions. This is only a brief summary of some key provisions; consult your financial professional to see how these changes may affect you. Credit and lending practices are revised The Act requires originators of residential mortgages to disclose any conflicts of interest and compare costs and benefits of mortgages offered to a potential borrower. Lenders also will be required to verify whether, based on income, credit history, and other data, a borrower has a reasonable ability to repay a loan plus its associated taxes, insurance, and other costs. This could mean that self-employed people and others whose income is undocumented or irregular will need better documentation to qualify for a loan. Lenders will no longer be able to give loan officers financial incentives that induce them to steer customers to a mortgage with a higher interest rate simply to increase their own commission. Their ability to impose prepayment penalties when a borrower repays a loan early also will be more limited, and a holder of a hybrid adjustable rate mortgage must receive notice of any change in the interest rate six months in advance. Lenders are prohibited from refinancing an existing mortgage unless the new mortgage offers a net benefit to the borrower, and they may not coerce or induce an appraiser to make a faulty appraisal of a property's value. Loan applicants must receive a copy of the appraisal on the property no later than three days prior to the closing. High-cost mortgages are subject to special regulations. Any balloon payments on high-cost mortgages cannot be more than twice as large as the average of earlier payments, and a borrower must receive qualified counseling on the advisability of a high-cost mortgage before credit can be extended. Homeowners who are unable to make mortgage payments as a result of losing their jobs or because of a medical condition may now qualify for up to $50,000 in assistance loaned through HUD's existing Emergency Mortgage Assistance Fund. Increased protection of bank deposits becomes permanent During the financial crisis, the Federal Deposit Insurance Corp. (FDIC) temporarily increased from $100,000 to $250,000 the amount it will insure on deposit accounts in FDIC-insured banks. The $250,000 limit is now permanent. Greater transparency and accountability for investments and related services Institutional investors' inability to determine the amount of global financial exposure to derivatives--investments based on the value of other investments--contributed to the panic at the height of the financial crisis. Over-the-counter derivatives must now be traded on a public exchange, and trades must be cleared through a registered clearinghouse. Nonstandard derivatives can still be traded privately, but must be reported to a central authority in order to increase regulators' ability to monitor the overall level of activity. Hedge funds and private-equity advisors will be required to register with the Securities and Exchange Commission (SEC) and disclose to the commission information such as investment positions and the amount of leverage involved. Also, the $1 million minimum net worth required to be an accredited investor eligible to invest in such funds will no longer include a principal residence, and that $1 million threshold will be reviewed every four years.

5 Credit rating firms, which were criticized for being too lax in their evaluations of securities based on subprime mortgages, will be subject to oversight by the SEC, which can fine those that issue too many faulty ratings over time. Also, investors will now have the right to sue an agency for issuing ratings it knew or should have known were flawed. Shareholders of public companies will have the right to a nonbinding vote on compensation for the company's executives. Also, protections for people reporting securities law violations have been enhanced. Whistle-blowers with information that leads to monetary sanctions of more than $1 million will be eligible for 10 percent to 30 percent of the funds collected from the offender; if an employer retaliates, a whistle-blower can sue without waiting until administrative remedies have been exhausted. An Investor Advocate office will be established within the SEC to help individual investors resolve significant problems and to promote investor interests. Risky banking practices are addressed Banks will be required to hold additional capital to cover potential losses, and some securities are no longer acceptable as vehicles for capital reserves held by large banks. Banks also will be required to retain at least 5 percent of a loan on their books if the loan is sold and/or repackaged with other loans and securitized. (However, some relatively low-risk mortgages, such as fully documented loans with a fixed interest rate, are exempted.) Banks also will be more limited in their ability to engage in proprietary trading in their own accounts, which could represent a conflict of interest with their responsibility to their clients. They also will have to set up separate operations to handle their most risky derivative trades, such as swaps. A bank will not be permitted to invest more than 3 percent of its core capital in hedge funds and private equity, but it may still organize and offer them as long as certain conditions are met. A Consumer Financial Protection Bureau overseen by the Federal Reserve will be created to regulate consumer financial products and services. Systemic risk will be monitored, and liquidation of large banks will be overseen A new Financial Stability Oversight Council is charged with assessing and managing risks that could threaten the entire U.S. financial system. Also, the FDIC will manage the liquidation of a bank whose failure the Treasury Secretary determines would disrupt the stability of the nation's financial system. That will include firing corporate management responsible for the failure and prohibiting any payments to shareholders until all other claims are paid. The FDIC may borrow from an Orderly Liquidation Fund to pay for a liquidation, but those costs must be replenished not from taxpayer funds but from claims on the bank and, if necessary, assessments on large financial institutions. The Act does not permit the Federal Reserve or the FDIC to lend to or provide a guarantee for individual or insolvent companies or banks, but both may lend funds to provide liquidity. Richard Pittman National Committeeman NAIFA Memphis rpittman@investorscapital.com

6 VIP Sponsors Platinum BLUE CROSS BLUE SHIELD OF TN 85 N. DANNY THOMAS BLVD. - (901) WELLNESS FIRST / EXAM ONE 2725 KIRBY PKWY. (901) GOLD GUARDIAN 6000 POPLAR, SUITE 113 (901) SILVER APPS PARAMEDICAL SERVICES 275 WALNUT BEND S., #101 - (901) PORTAMEDIC 8001 CENTERVIEW PKWY., #213 - (901) MILESTONE FINANCIAL GROUP, INC. 751 Walnut Knoll Lane (901) To become a VIP sponsor please contact the association naifamemphis@naifamemphis.org 2010 NAIFA Memphis Golf Tournament Memphis National October 5, 2010 Registration - 11:45 AM Shotgun Start 1:00 PM T H E A G E N T A D V O C A T E The 2010 NAIFA Memphis Annual Golf Tournament was rained-out on May 24 th and June 17 th this year. But, as they say, Third time is Charm, so we have rescheduled this year s tournament on Tuesday, October 5 th at Memphis National Golf Club. Registration will be at 11:45 with a shotgun start at 1:00. We need your support and we would like to add a few more teams, so if you have not registered, please complete the attached form and submit prior to 10/1/10. The weather should be much more pleasant and prediction is for a sunny, cool day! We look forward to seeing you at the course. If you have any questions please or call me. Rick Pittman Tournament Director (901) rpittman@investorscapital.com To our New Members!! Cherie Berenato Joao Henriques Todd Stein

7 Government Relations Wins and Accomplishment What we are doing for You and Your Business! While You Were Working August 2010: NAIFA and its member associations continue to be successful in helping state lawmakers amend their state life settlement laws to include anti-stoli provisions designed to protect senior consumers while not harming the legitimate life settlement market. To date 30 states have enacted anti-stoli measures. August 2010: So far NAIFA has warded off proposed taxes on life insurance as part of President Obama s general federal budget or as pay fors for numerous new Congressional programs enacted this year. July 2010: After nearly 18 months of contentious debate, Congress passes the largest overhaul of the regulations of financial services since The Great Depression. NAIFA played a leading role in successfully advocating against Congress immediately imposing an unjustified and impractical legal fiduciary standard on registered representatives when providing advice to clients. Due to NAIFA s efforts, the following key fiduciary provisions were included in the final bill: Financial Planning SRO NAIFA played a leading role in successfully defeating an effort to designate financial planning as a profession subject to new Self Regulatory Organization requirements (i.e. additional fees, standards). Indexed Annuity Regulation Resolves state insurance/sec regulatory battle over indexed annuities by establishing incentives for the States to adopt the NAIFA supported NAIC Suitability in Annuity Transactions model law Federal Insurance Office (FIO) of information Establishes NAIFA supported office to house federal life insurance and property/casualty insurance industry expertise Senior Investor Protection Establishes grant incentives for the States to adopt NAIFA supported model laws aimed at addressing misleading and fraudulent marketing practices aimed at seniors July 2010: NAIFA secured Congressional support for the role of the agent on Over 20 Members of Congress wrote to HHS Secretary Sebelius requesting the inclusion of agent language by October 1. July 2010: National IFAPAC s candidate contributions for the election cycle top $1,000,000. June 2010: Congress passes 401(k) fee disclosure legislation after jettisoning a NAIFA opposed proposal to limit agent/advisor contact with employees of 401(k) plan sponsors or without expanding the fee disclosure requirements to 403(b) or 457 plans. May 2010: The Senate rebuffs a NAIFA opposed proposal to add an amendment to the Wall Street reform bill that would have eliminated the state regulation McCarran-Ferguson Act protections for health insurance companies. May 2010: 27 NAIFA volunteers participate in the YATs and Political Involvement webinar. May 2010: NAIFA is first insurance organization to announce formal policy opposing a relatively new practice known as stranger-originated annuity transactions (STATs), and NAIFA testifies on May 20 at a hearing on STATs held by the NAIC s Life Insurance and Annuities Committee. March 2010: After 14 months of contentious Congressional and Presidential debate Congress passed sweeping changes to the U.S. health care and insurance delivery structures to be implemented in phases over the next 8 years. From a NAIFA member perspective, immediate positive outcomes in the legislation include: The traditional role of agents remains. HHS Secretary barred from setting agent commissions. No U.S. government-run health insurance plan will be created or offered to the public. Individuals required to purchase coverage or face a penalty. Tax incentives offered to small businesses to help them pay for health insurance plans for their employees. No tax on most employer-provided health insurance plans except richest Cadillac plans Flexible Spending Arrangement (FSA) annual cap is retained and indexed. Health Savings Accounts (HSAs) remain legal as a low cost option, although HSAs could be challenged to meet required future benefit standards. Congress excluded supplemental benefits like vision, dental and disability income from this legislation. March 2010: As Part of healthcare/insurance reform, the House passed repeal of the McCarran-Ferguson Act s protection from federal/state antitrust laws for health insurance companies to share cost data used in setting rates. At NAIFA s urging, the Senate rejected the idea and therefore it was not included in health insurance restructuring legislation signed by President Obama. March 2010: For the most part, NAIFA blocked new taxes on life insurance and annuities to help pay for healthcare/insurance reform. Annuity payments to high income individuals and couples will be subject to a 3.8% Medicare tax as part of a tax on passive income. March 2010: Senate Banking Committee approves regulatory reform bill that includes many changes supported and lobbied by NAIFA. Shannon K. Shriver CLU, CRPS, CLTC Government Relations (901)

8 V O L U M E X V I I I P A G E 3 NAIFA Memphis Member, Jack Dewald, CLU, RHU is 2010 Chair of the LIFE Foundation, and recently posted this blog post on LIFE's website about Life Insurance Awareness Month and the importance of the guarantees offered by life insurance. Guarantees in an Insecure World Not many people are interested in plain vanilla, when triple-fudge bomb is available. Let me explain. The promise of big even huge returns on investments during the halcyon days of the market drew many people s eyes off a financial-planning fundamental: life insurance. Who wanted to talk about death and 3 or 4 percent returns on the cash accumulation feature in a permanent life insurance policy when the promise of double-digit returns in the market lay glittering on the horizon? Then the market tanked, taking with it 20 or 30 percent of many people s portfolios sometimes even more. That has lead to a renewed interest in the plain vanilla of the financial planning world. September is Life Insurance Awareness Month, the perfect time to explore why proper amounts of life insurance should be the foundation of your personal and business financial plan. People are facing an entrenched recession, collapsing job security, depleted retirement accounts and an unstable investment environment. The beauty of life insurance is that it offers guarantees in a world that suddenly seems void of them. Life insurance provides guaranteed death benefits that keep your family secure in the world they know and the lifestyle they are used to, should the worst happen to you. Used as a planning tool for small-business owners or partners, those same guaranteed death benefits can help keep your business from dying along with you. What other kind of financial product allows you to pay a such a small amount to ultimately receive such a large, guaranteed benefit? It s also good to keep in mind that permanent life insurance policies offer you a guaranteed accumulation feature. As the cash value of the policy grows, it offers you another, not often talked about, feature: the ability to take out a loan against that amount guaranteed. No bank or savings and loan is going to offer you that promise. What a blessing that guaranteed loan might be if a family or business emergency came along and you needed to tap that money, no questions asked. It seems to me that you owe it to your family and business to take a look at how the guarantees of life insurance can secure their world. Wouldn t it be nice to know that you had a life insurance policy that promised to pay when your loved ones or business partners needed it most? Remember: You Can Renew Your NAIFA Membership Online Renew your membership investment in NAIFA with our fast and easy online renewal process. Simply go to and click Renew at the top of the page. Would you rather pay your membership dues in 12 easy monthly installments? Renew online through our monthly bank draft or credit card program. If you elect to have your dues deducted/charged on a monthly basis, dues are debited/charged from your account or to your credit card on the 5th day of each month. If the 5th falls on a weekend, the debit will occur on the next business day. Please note, NAIFA only accepts VISA & MasterCard for enrollment in the monthly credit card program. Don t wait any longer renew today!

9 Why People Buy Life Insurance People Buy Life Insurance: For the Death Benefit: To replace earning power at death To pay for cash needs that arise at death As a Disciplined Savings Program*: To help pay for educational costs To supplement retirement income To take advantage of business opportunities For financial emergencies Because of the Risk of Waiting: Insurability may be impaired or lost Premiums are lower now than they will be at a higher age To begin building cash values that may be used in the future for collateral For the Tax Advantages: Death proceeds are received free of income tax Cash value accumulations are tax deferred Cash value loans or withdrawals* are free of tax, as long as the policy stays in force Accelerated death benefits are received free of income tax In Recognition of Personal Responsibility to: Family Banker Mortgage company For the Flexibility: Benefits may be available regardless of whether the policyowner lives, quits, dies or becomes disabled Life insurance is portable; benefits are not lost due to job changes * Withdrawals and loans wil reduce the policy s death benefit and cash value available for use. VSA 2A2.12 ed Page 1 VSA, LP The information, general principles and conclusions presented in this report are subject to local, state and federal laws and regulations, court cases and any revisions of same. While every care has been taken in the preparation of this report, neither VSA, L.P. nor The National Underwriter Company is engaged in providing legal, accounting, financial or other professional services. This report should not be used as a substitute for the professional advice of an attorney, accountant, or other qualified professional.