Their presence in Washington was needed. The Senate Antitrust and Monopoly Subcommittee began investigating the life insurance business February 19-23. Reporting on the proceedings, Life Association News noted:

Life insurance companies, agents and insurance commissioners came under heavy attack from most of the 17 witnesses testifying during the first round of hearings….

In opening the hearings, subcommittee chairman Philip A Hart (D-Mich.) observed, "There is a very clear antitrust concern over the way the life insurance market operates today…"

The lead-off witness was consumer advocate Ralph Nader, who charged that the industry's "contrived complexity, secrecy and public relations have fulfilled a strongly supplementary camouflage function. Hidden behind this camouflage are two principal levers of maximizing life insurance company profit or surplus—deception and ironically, gross waste. Neither redounds in any way to the consumer's benefit."

Nader further charged: "Through deception and inadequate information, the life insurance industry dupes husbands into short changing their wives and children by buying too much of the wrong kind of insurance or too little of the right king at excessive prices…"

In his testimony, Joseph M. Belth of the graduate school of business at Indian University said the life insurance market is best characterized by three words, "ignorance, complexity and apathy." Their combined effect, he believes, "produces fertile ground for the exploitation of consumers.

Belth maintained that the technology exists for accomplishing adequate disclosure procedures; all that is needed is legislation to implement it. Belth suggested this alternative to a rigorous disclosure system: the standardization of life insurance policies and a drastic reduction in the number of policy types.[xxxxi]

Spencer L. Kimball, professor of law at the University of Chicago pleaded for keeping matters in perspective. "There are many difficult problems, but there are not now as there were once a long time in the past, gross abuses of the public," he insisted. "Whatever its deficiencies, it is my considered judgment that the life insurance industry on the whole is run by honorable men. It is not a monster, seeking to gouge the public. Conservative and lacking innovativeness it may be; reluctant to accept some modern techniques for the clarification of the life insurance market it undoubtedly is. Nevertheless, the life insurance industry is not responsible for any substantial part of the ills of the modern world… It is not bad, nor immoral nor lacking in concern for the public welfare, any more than the rest of us." Kimball explained that the theory behind price disclosure by an interest adjusted method is that the policyholder should know what he is paying for his protection so he will not be misled into thinking that he is getting it for free.

Unfortunately moderate realists such as Kimball held little sway over public opinion at the time. Among the leaders in the NALU it was becoming clear that the public's perception of the business and the popular impression of the agent and his role were concerns that merited top priority. Underscoring this in his "Viewpoint" column for June 1973 Carney Smith observed, "NALU is big business. Increasingly the future of its membership will depend upon activities not directly related to the sale of life insurance. The future of the agency system may rest on the activities of such committees as Public Service, Public Relations, Federal Law and Legislation, State Law and Legislation, and others."

In this atmosphere of consumerist activism the NALU reinforced its long established support of professional education and training by adopting a new policy favoring meaningful licensing examinations of life underwriters coupled with continuing education requirements. In 1973 at the January board meeting Steiner proposed the establishment of minimum educational qualifications for agents joining local associations. "The time has come," he told the board, "For us to consider seriously the setting of minimum training requirements of continuous membership in NALU. If a life insurance salesman is not willing to meet these minimum requirements within five years from his initial date of entry, I seriously doubt that we should lend the prestige of our organization to him." Noting that the Life Underwriter Training Council was willing to cooperate in developing standards, Steiner pointed to the success of the Life Underwriters Association of Canada in getting agents to comply in meeting a set of minimum standards. The board agreed and a task force headed by NALU secretary Norman G. Levine set out to come up with some specific proposals.

Meanwhile, in February, a special Career Path Development Committee met at NALU headquarters to consider the various approaches to establishing guidelines for competency and success in the business. It was a distinguished group. Former NALU president Herbert Mischke acted as chairman. Insurance commissioner J. Richard Barnes of Colorado, Dr. Paul Thayer, senior vice president of the Life insurance Agency Management Association, Dr. Kenneth Black, Jr., dean, School of Business Administration at Georgia State University, and Dr. Vane Lucas, vice president of the American College of Life Underwriters, were some of the members. "The purpose of the committee," Carney Smith explained, "is to upgrade the competence of life underwriters by creating a program of training for them that can be followed by all companies within the framework of their own operation."

The ideas generated at these and other meeting throughout the year met with the approval of the majority of the agents. The following fall the National council passed an amendment to the constitution and bylaws mandating minimum professional education criteria for continuing membership. The rule applied only to those joining local associations after January 1, 1974. Within five years after joining an NALU affiliate, each member had to show evidence of having successfully completed two parts of an LUTC course, or either part of an LUTC life course and two parts of a CLU course, or any four parts of the CLU curriculum. In some cases company training courses at a comparable level could be accepted. "This is probably the most significant step that we have taken as a response to consumerism," Smith commented, noting that NALU's action had been endorsed by the National Association of Insurance Commissioners and the companies as well.

Mischke's committee produced a booklet outlining the opportunities as well as the personal qualities and educational requirements needed for a fulfilling career in the business. While it set rather high performance standards, the booklet nevertheless offered specific practical advice for pursuing the avenues of success in the various marketing areas for life and health insurance. In 1974 when Mischke's committee released its career path document, Smith told the agents:

The career path document is the second step to demonstrate to the world that we know that service is our business and that we are doing all we can to encourage our members and all who wish to join us to prepare themselves to give more and better service.

We realize that there are significant differences among life underwriters with respect to the types of insurance, markets, products and volume being sold. It is the opinion of NALU, however, that continuing professional education and career development should be the primary objective of every life underwriter. Continual changes in products, markets, public attitudes, government programs and laws which affect the insurance industry and the insured make it necessary for competent life underwriters to follow a pat of meaningful career development.[xxxxii]

The NALU also increased its real estate holdings in Washington substantially on August 1, 1973, with the purchase of the 19th century townhouse at 1918 F Street, the lot adjacent to the Association' headquarters, at a cost of $155,618.41. Reporting to the Executive Committee at the group's January 1974 meeting in Miami, NALU treasure L. Kent Babcock said that the property was purchased "with NALU assuming a $5400 mortgage and paying $100,00 in cash. The mortgage carries an interest rate of 6 3/4% and matures July 1983." Offering furthering details, the report noted, "It is currently rented for $1350 per month. That figure is tentatively scheduled to be increased to $1750 per month." The tenant was the Government of Uruguay, which used the building at its chancery.[xxxxiii]

By September 1, 1973, combined membership in all associations amounted to 118,000. Lester A. Rosen agent for Union Central in Memphis became president of the national organization at its annual convention in Chicago. Rosen was highly regarded in insurance circles and a well known figure nationally. He had entered the business shortly after his graduation form the Wharton School in1933. Named president of the Million Dollar Round Table in 1962, he had also served as chairman of the life Underwriter Training Council in 1967. Life Association News commented, "Lester Rosen is a soft-spoken but persuasive man who generates good will and reasonableness. He has demonstrated his ability to rally others to important purposes through cooperative, harmonious action, and he looks to his NALU presidency with an all-encompassing 'whole-man' concept of the career life underwriter."

In his report to the convention Carney Smith reviewed the NALU's continuing influence abroad:

Our interest in life underwriters everywhere has continued though the years. We have helped organize associations in Jamaica, the Bahamas, Europe and Japan, and just recently it appears there will be an association in Singapore. There is a delegation from Japan attending this convention. I want you to know that your president and other delegates form this country representing several of our states made a big impression on their Life Insurance Education Forum held in Tokyo in April. The work that we have done over the years in aiding life underwriters around the world has been cited by the international People–to–People program as an outstanding example of the kind of diplomacy that they believe will lead to peace.[xxxxiv]

Rosen made an excellent good will ambassador for the agents. Extending the NALU's international influence farther, he and Smith traveled to Australia and New Zealand that winter. Neither country, they discovered had agent licensing laws and the relationship between agents and companies left much to be desired. "We were invited because agent needed helping getting their associations organized and functioning better," Smith said. "LUTC and CLU do not exist. Some life companies have training programs, but most people selling life insurance have no training." Reporting on conditions in Australia, Smith told the agents, "Companies fear that a strong association of life underwriters will lead to a union. We assured company executives that NALU is not a union and that we did not believe associations in Australia or New Zealand would become agent unions. It was most enlightening when we sat down with chief executives of major companies in Sydney and Melbourne. Not only was this the first time that company officers had sat down with agents, but it was also the first time all the executives had sat down with each other."[xxxxv]

Smith had personally delivered sets of the LUTC textbooks to the association leaders in New Zealand and Australia. Friendly relations with the Australians became more firmly established a few months later when T.A. Westley, federal president of the Life Underwriters Association of Australia, visited Smith and members of the NALU executive staffing Washington. Wesley found the time spent with members of the LUTC staff particularly enlightening.

Foreword by Alan Press, 1988-1989 NALU President

Preface by Jack E. Bobo, 1989 NALU Executive Vice President

Introduction

Acknowledgements

Chapter 1

Laying the Foundation—A Meeting at the Parker House

Leading Figures—Ransom, Carpenter, Blodgett and Plummer

Conditions Leading to the Foundation of the NALU

Rise of Modern Life Insurance and the General Agency System

Issues and Accomplishments of the First 15 Years

Chapter 2

In the Wake of the Armstrong Investigation

A Royal Commission Investigates Life Insurance Operations in Canada

A Period of Growth and Visibility for the NALU Under Strong Leadership

The NALU Plays a Leading Role in Insurance Education

The NALU During World War I

Chapter 3

The Post-War Decade

The NALU's Extension of Activity

The Agents Move for Recognition

Chapter 4

The Depression and Aftermath

Annual Conventions and Midyear Meetings

The NALU Celebrates Its 50th Anniversary

Chapter 5

The Agents Earn Their Wings

World War II

The NALU Joins the Industry in Legislative Battles

The NALU Establishes the National Quality Award

Chapter 6

Controversies and Schisms (1946-1956)

The Foundation of LUTC

The Nola Patterson Affair

GAMC Formally Organized

Chapter 7

The NALU Goes to Washington

Dispute Over Minimum Deposit Insurance Plans

GAMC Stages First LAMP Meeting

The NALU Celebrates Its Diamond Jubilee Year

The NALU Increases Political Activity

U.S. Senate Antitrust and Monopoly Subcommittee Investigate Life Insurance

The NALU Responds to Consumerist Activism

Chapter 8

The NALU Reaches the Century Mark

FTC Releases a Study Critical of the Insurance Industry

Formation of the Women Life Underwriters Conference

Drop in Local Membership

The NALU Issues Statements on AIDS

The NALU Combats a New Wave of Attacks

The NALU Celebrates a Century of Service

Open Book

Book Marks

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