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2008 Top of the Table Annual Meeting
October 22-25, Austin, Texas, USA
Title: Underwriting Insights for Top Producers The Million Dollar Round Table® does not guarantee the accuracy of tax and legal matters and is not
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2008 Million Dollar Round Table® 
MDRT – Underwriting Insights for Top Producers – Eli Rowe Moderator: Eli Rowe is chief executive officer of Parameds.com founded in 1998. Parameds.com utilizes a nationwide network of requirement retrieval specialists and risk management professionals as well as medical examiners throughout the United States to support, life, disability, long-term care and health insurance companies in North America. Rowe has spoken at numerous industry functions, is regularly published on the risk, the scholarly journal of the Academy of Life Underwriting and has contributed to Insurance News Net. He’s also active in charities, sits on the boards of many industry and non- industry charity and association organizations, the secretary and treasurer of the Metropolitan Underwriting discussion group and is an active volunteer paramedic in New York City. Let’s give a warm TOT welcome to Eli Rowe. I can say it’s a pleasure to be here and I’m surrounded by some friends and surrounded by some super professionals that I’ve had a tremendous amount of respect for in our industry over the years, and even people that I’ve had the privilege and pleasure of working with over the years. And to me that is most welcoming with the opportunity to be here today. I’m going to actually talk about four or five different topics. I’m going to save the best for last. Some questions that were actually poised to me before we started today, were on the world of electronic medical records and the transforming or the metamorphosis, if you would, of where our industry has been. (Also) where it’s at currently and where it’s going. I’m going to actually leave that for the end of the talk. Through my next 20 minutes or so, I’m going to touch on some topics that are relevant to all of you in some way, shape or form if you’re dealing in the new business arena or if you’re dealing in the life expectancy in the Stranger-Owned Life Insurance (STOLI) and whatever you may be dealing with, perhaps not you directly. Some of you have come over to me before and said, remind me what an Attending Physician’s Statement (APS) is because I’m so far removed so teach me a little bit about what’s going on in We’ll talk about the various different components that I like to refer to as the underwriting data gathering process, which typically encompasses from our perspective in the data gathering if you would, the medical exam. Where we send out somebody to get the current state of health, the past medical history which is typically an APS or a series of APSs. The actual term APS refers to an abbreviated statement that comes from the doctor which is used in England a lot which is used in other countries for those of you who collect medical records or are from other countries such as Canada only has an APS. They’ll typically never release the actual packet of records. We in America, get over here the medical records, but they still refer to it as APS. I’m going to talk about life expectancy and how that underwriting relates to and as well differs from conventional underwriting, and I’m going to talk about underwriting the elder population. And then at the end we’re going to talk about what’s new in the world of medical records requirements and in the world of actual how we go about obtaining, presenting and how we’re going to start to try to take the upper hand away from some of the people that are To start with a little bit of light fun, we’ll talk about as in my introduction: I actually fly. I spend most of my time in the air. I’m a citation type rated pilot and fly to most of the companies I visit on my own. Actually, this is one of my neighbor’s kids who wouldn’t shut up one Saturday afternoon. He begged me I spoke about a year ago in Las Vegas at the main stage of the Association of Home Office Underwriters (AHOU), the Home Office Association meeting. The crowd was different, it was the chief underwriters and the vice presidents of underwriting around the country. But you’d be surprised how much of a variation there is now, if you think about the high net worth clients that you have or that you may have come across or that you may come across and the way the insurance industry looks at aviation. It’s actually changing. It used to be, you were either a pilot or you’re not a pilot. Maybe you’re instrument rated or you’re not instrument rated. Today there’s a lot of different things that go well above this picture over here of just being a pilot. You’ve got things like one of the little planes that is very, very popular today, you may remember the Corry Lidle story where the Yankee in New York decided to take a perfectly good airplane and fly into a perfectly good building. That airplane had actually a device in it called the parachute where you could fire a rocket out of the airplane and then the whole plane would come gently down to the ground in an emergency. The kicker is you, need to actually deploy the parachute or else it just doesn’t do anybody any good. It’s kind of like taking a car and driving it What the insurance companies are starting to do is, and you probably haven’t seen this yet, but you will see this, is an intelligent expanded aviation questionnaire which will encompass things like do you have downloadable satellite weather in your cockpit so can you see what’s going on so you don’t fly into the eye of a storm to be able to make that happen. We can talk about aviation if you want during the question and answer session or afterwards if any of you have clients. But keep in mind just because somebody was rated or not issued insurance in the past, you can go back now with a lot of new tools and tricks and many of the new aircraft that are out there or coming have a lot more safety features and the insurance companies are actually looking at it a lot more favorably than they did in the past or that they would potentially without necessarily knowing that. A couple of other fun activities. This is a couple of scuba divers who actually I just heard a cute story about scuba diving where these guys were exploring some new reef and a shark was actually spotted coming close to them. One of them went and quickly put on his new super fast fins. So his buddy says you’re not really planning on out swimming the shark are you? Just out swimming As we go through rock climbing and there are tons of great new techniques to be able to go and do. I happen to wear a watch that has an emergency locator transmitter on it. There’s lots of different features that are out there now, and again that affect the ability for the insurance companies to look at it, whether somebody actually has an increased risk or less of an increased risk in that vocation or avocation that they’ll do. We’re going to come back to the story of driving in a little bit. We’ll start with the actual presentation. Before we talk about some of the tools, let’s talk about some of the complications and some of the problems that we have. I think everybody will agree that waiting on those medical records is the biggest time delay factor that we have in our environment. In order to be able to talk about what those various different components are, I’m going to use this board while I sit and talk very briefly. I like to refer to our industry in general and how we figure out who’s who and what’s what, what are the players within our industry, what are your choices, as scope versus turnaround time versus cost. “TS” being your Everything we do when you’re going through the process of evaluating and obtaining underwriting requirements has to do with how well does this process flow. The scope I’ll define as the Information Technology (IT) and the human resource piece of what goes into that. But the IT piece is not just how well the vendor does or how well the carrier does, but how does that IT piece integrate with your internal systems in your companies so those of you who are brokers and not just self-producers, can share that data with your clients, with the other agents that work in your environment and as well with any other companies that you’ll be able to take into play. The human resource piece is the people that are actually representing you, that are out there doing your exam. I’ve got to tell you something, there are some horror stories in our industry. I heard recently a story where an examiner showed up to a very, very high net worth client who lived in a rural area, showed up and the lady was late and said I’m sorry, I’d rather you reschedule. He said I can’t reschedule for another month, back and forth, could we get it done. Finally she acquiesced and allowed the exam to take place. Needless to say, he said I’m sorry but I need to use the bathroom. Well, she was late to pick up her kid for soccer. He sat there for 50 minutes in the bathroom and made a huge mess. This is from a very recognized company. Unfortunately, it’s just not Where you end up having your clients in a metropolitan area where you can control your examiners, you can say, well I know Dr. X or Nurse Y or examiner whoever to be able to go and make that happen. With the advent of the Internet and remote environments, and alternate distribution channel work, and all sorts of Internet ability to be able to gain clients and clients with their travel schedules, it’s not always easy to control where that exam takes place. (Or) who’s doing that exam, how well that exam is done, both in a proactive and a reactive request of making sure that you get professionalism done, and then the disaster by which to control it. So we’ll speak about some potential solutions that the industry is going to, the way that happens. On the APS piece of it, the biggest delay if you would, is twofold. One, waiting for that APS or that medical record to come in. I’ll tell you that the national average to be able to get medical records today is about 17 to 18 calendar days, which isn’t bad. If you tried to do it yourself, it could be longer. Not so much because you wouldn’t have a person every single day calling and diligently following up on your requirements. But the bigger issue is where there’s a special authorization from a facility and that is, I don’t know how many of you are familiar but facilities like a Kaiser or a Cleveland Clinic or a Mount Kisco Medical Group, or the Veterans Affairs (VAs) or you name it, you can be the top of the Top of the Table of Million Dollar Round Table and you can tell them that, and they will say call me back in 30 days and if you call me sooner, we’re putting it at the bottom of the pile. This is not a joke. Now what do you do because right now you’re competing against the guy sitting to your left in this room and you know that you want that premium at least as much as they do? So what do you do? And the answer is, go ahead. And actually that’s not a bad answer. In fact that’s probably one of the better answers. Our job in the human resource and when I say ours I’m not speaking about our company because there’s absolutely no reference to anything I do, that’s my official disclaimer in case I do it by accident. It’s purely by accident. But what professionals like your chairman, Mark Dorfman, will do will be select a company that has the ability to be able to figure out which of the 600,000 doctors in America, and the 90,000 facilities that are ultimately controlling your financial destiny, these are the gatekeepers of your medical records, to be able to make that happen. Who has the closest ability or the fastest ability to break that? And you know who does? Yes, the people that know the date of birth of Susie who works in the medical records, and the people that know the flavor of coffee and the style of Dunkin Donuts they have. And actually figure out a way, not just by one, because you may not break that person on a one time ability, but to be able to break the trend over there what I’m going to refer to as a cycle of violence or a cycle of rape within our industry. What’s really happened if you think about it, is many years ago the doctors were getting all sorts of nice money from the insurance companies. Getting all sorts of nice money from the proposed insureds, their patients, and they were very happy. Comes the Health Maintenance Organization (HMOs) and comes this tremendous cut, now they feel like, “Hey, wait a second, we’re no longer interested in sitting back getting $7 to be able to evaluate one of your patients, so when Bruce Mack is going to call me up for medical records, even if I only have one page, I’m going to charge him $150 and I’m going to say Bruce, you know what, either you pay that $150 or you’re not getting your medical And you know what Bruce will do? He’s going to pay the $150. But your insurance companies may not be so excited to reimburse you on that. So how Right now, there’s on the top of that cycle. How do you beat that? And we’re Q. Some states have a state law that limits what you charge, but the APS services don’t enforce it, they just … It’s a fantastic question, and it’s good and it’s right on the money. And the answer is a lot of states have that, and they’ll say it’s $1.25 a page, or 75 cents a page. Dr. Stein, in his $3 million Madison Avenue office will say, you know what, it is only 75¢ a page and there are only 10 pages so it’s going to be $7.50. But, in my office, I’m Dr. Stein chief cardiologist at New York Hospital, I don’t release any records without reviewing them first. I’m going to charge you $1.43 to $1.50 to be able to review those records. So your total bill is now $151. Or, Bruce Mack, it’s $7.50. I’ll send it to you, send me a check for $7.50, you’ll have those records within six months. So the answer is yes, the law is absolutely, and you can even sue them. And you know what, you’ll probably win. Seven years from now you’ll get your In this cycle of rape they’re winning right now. We’re going to show how that will change or there’s a huge effort to change that, but let’s go through that. So the first challenge if you would is in the delay in getting those records. I have to tell you something, when you talk to your underwriters and you talk to the people that are actually putting those dollars and cents in your pocket once you have a proposed insured who you want to turn into a real client, everyone will tell you the biggest delay is in getting that set of medical records. The next delay is once you get those medical records, how quickly do your underwriters and do your carriers turn them around? Because that’s potentially equally disastrous. Now, anybody sitting in this room here is sitting here for a reason because you’ve made it to the top of your food chain and you are the most successful people in our industry. But even so, when you’re going to put in a case in a company that you may not have a great relationship or you have a great relationship but it’s quarter end or yearend or what have you, at that point you can sit there days or weeks in a bad case, and that time is So what’s the solution to that? The potential solution to that is APS summaries. Has anybody here actually seen an APS summary? No. We happen to have an example to show you what it is. This is a metamorphosis of the industry at the secondary stage in that delay factor, and that delay factor is solved by being able to say to them you’ve got a delay, let’s try and help you. Let me just throw a question out to the crowd. What percentage of informals do you think get placed by the average large carrier in America? The answer is under five is the usual number, or four or five. So anybody that said under 10, depending on the carrier, you’re there. Thirty percent? They would love 30 percent. It just doesn’t happen. What that translates into is 95 percent of the cases are waste. And why are they wasted? They’re wasted because the underwriters in the underwriting departments are going through mounds and mounds and literally tons of paperwork. Whether it’s online or paper to be able to figure out that your application is no good. So the answer is remove all the garbage because if they can remove that 95 percent, they’ll be able to focus on your five percent and be able to issue you your policy. You’ll be able to get your premium service, your client and move on to the next one which is ultimately what you want to do. And you put it in six companies and one of them gets placed. I can tell you that when we’ve polled the big companies that we work with like the Mets, the New York Lifes, like the John Hancocks, like the INGs, they’ll tell you they place under five percent of the informal apps that come their way that they actually go through. They’re totals. That’s an actual number. Q. Sounds like informal apps are not taken as seriously as a formal app. That is true. It’s not an issue of not taken as seriously. Their percentage of placement, they all want the business, nobody is sitting there today turning away the business. They’ll say send us the business. I’m going to show you in a minute where we’re going with this and what the insurance companies’ answer is in certain companies. Typically when it’s formal and it’s only placed from a carrier to them, their place rate is much higher. I think they do give them formal credibility and I think your point is an excellent point and well taken. I think it still doesn’t necessarily help the fact that ultimately they’re bogged down with a lot of business that doesn’t get placed and that ends up causing a backlog and a delay which ultimately will impact from a turnaround time and from a case placement, your ability to place your case even though ultimately you were going to place it. You may have placed it two weeks earlier with a preferred carrier. The fact that you ended up placing it two weeks later with somebody else, it got placed but was Let’s take a look at what some companies are doing. APS summaries have been around for a while. They impact the profitability of you guys by speeding up cycle times. It’s essentially taking a 200, 300, 20, 50 page APS, condensing it into a user format that as you’re going to see in a minute, in the next couple of slides, is not only now limited from a one, two or three hour effort to be able to look at a case, but now within five minutes your underwriter can say do I want to delve into this further or do I just want to throw this out. We believe based on the feedback that we’ve gotten, it’s a fantastic exclusionary tool. If somebody has a 23 percent ejection fraction from his last MI, that’s on page 212 and he’s non-insurable, why spend 2 ½ hours of the underwriter’s time to get there to discover he’s not insurable. Whereas, boom knock it out, just spend the time on that. If it is a good APS and they like what they see, There are various different ways that they are used today. Let’s take a look at In this particular case you have any of the information that would want to be on there, and to be able to put on a particular case, you’d have various different sections on the ability to be able to look at it. Any and all of these sections would be then delivered to the insurance carrier, the agent, the broker, what have you by virtue of the fact that it’s over there on that. That would seem apparent and would make sense. Where this is going in the next level is those pieces of data would then get stored, depending on whether you have the Health Insurance Portability and Accountability Act (HIPAA) ability for you to be able to see your client’s information, which a lot of you do have that. To be able to now take that, store that as actually critical pieces of useful data about your proposed insured and your claimant’s history. If you had a person that was rejected because he’s an insulin dependent diabetic with a particular company. And this company now changed their underwriting rules and they now insure diabetics, well you can go and pull up in two seconds, let me go and look who all my proposed insureds are that could not get insurance six months ago, or where rated and now let us resell or re-go and bring them to the next particular group. It’s a fantastic tool from your perspective, a fantastic tool from the insurance company’s perspective because it’s chopping down the time and the ability to Summaries impact profitability and producers, speeding up cycle time, improving risk analysis and meeting the requirements. They’ve been around for a while. Now they use not just as an underwriting tool, but as an administrative tool for you and there’s a tremendous use for what’s called just in time underwriting which you’ll see, which is where the insurance carriers themselves say we can’t handle this so we’ll just use them in January or we’ll Let’s take a look at a quick case study, ING. I don’t know if you’ve heard yet but there’s a new ING initiative. They’ve come to us and said we’re not interested in 300 page applications. Have people heard about this yet? We’re not interested. We want to have a 20 page application maximum, or a formal app. But on the informals, they’re just not interested. How do you get a 20 page application from four medical records where they’re 85-200 pages each and you’ve got your medical exam and you’ve got your MDR and you’ve got your lab results and your telephone interview and everything fed in there? The answer is you pay for an APS summary and you deliver it. But, APS summaries are expensive. Somebody is doing this on the backend and the person that’s doing this is either an underwriter or a medical person be it a doctor or a nurse. So they came up with a very, very clever solution in my mind, I at least appreciated the cleverness of it. They say if you want to submit an application to us, we’re placing five percent of it, meaning that we’re paying for 95 percent that we’re not interested. Why don’t you go and you pay for this cost, and the cost will typically be a per hour cost where it will vary depending on who you use probably from $50 to $70 an hour. If you’ve got two or three hours of work, you’ll have to pay let’s say $150 to be able to create this packet. Now the carrier says, “Wait a second, if you’re going to submit it through us, we will not only reimburse you the cost of getting this done, but we’ll double Quite clever, right? So now instead of paying only $150 and paying it one time on five percent and wasting it on 95 percent, they’ll actually pay on 10 percent even though they never got the value on the other five percent, but they’ve removed the entire waste on 90 percent minus that arbitrage of whatever the time it takes to be able to look at it. Clever. So that’s where the insurance The bad part of that is if they’re doing it for you, then you don’t have access to that data to be able to shop it around. Once you have this, think of how much quicker it is to take a two page document, send it now to 10 carriers and say I You get it, that’s exactly right. No, I’m saying if you were to do this on your own, then you can have it. Some carriers are doing this themselves where the carriers are actually requesting the records. Where the carriers request them, then they own that summary and then you can’t shop with it. Sorry if that I’m just going to blow through this because of the time factor. Simple fact, over- taxed underwriting departments, cycle time, 35 percent to 70 percent of a home office underwriter was spent reading garbage, not garbage but cases that would have never been put through in the first place. And now it benefits the Risk analysis for potential life settlements. If you think about it, it’s the reciprocal that you look for, right? I know that when an APS company goes out to get them we always run the risk of the doctor being friends with or brother- in-law with a proposed insured and page 53 that speaks about his recent memory possible rule out TIA just happens to be missing from that particular page and his sleep apnea was never a problem. All of a sudden now when it comes to getting the records for that, there’s as much information as you want or as you need needs to come so every single condition is on there. When you’re doing the summaries you can slant them for specific products. You can look if it’s cognitive issues for a long-term care product for those of you that do that. Any debilitating issues for a disability insurance (DI) product. Health status for financial estate planning. There’s a lot of data that goes into these things outside of just what we saw. Producer tool. For trial and new applications, I think it’s fantastic for you to be able to have it on data as well as be able to store it. And there are also companies that have started to do hyperlink which is when you click on any place on that APS summary, it automatically hyperlinks you to page 47 so you can look for detailed clarity. It becomes an adjunct tool to that set of medical records, not a replacement of but an ability to be able to zero down. Supportive tentative underwriting decisions. We’ll say based on whatever we saw, yes, we’re going to give you a guaranteed yes or no and new business requirement for carriers is what it’s coming about. What’s changed? Well, reports can easily be customized. They’re focused on specific products. No longer one size fits all, and it’s shorter, more concise For those of you who know what the Physician’s Desk Reference (PDR) is where you look up your physician desk reference. It can interlink into the PDR so you have a triangulated environment between a medical condition, the medical doctor and the medications that they take. So if somebody is taking Mevacor we can assume they have hypercholesteremia or at least prophylactic for something for their cholesterol and they should be seeing an internist or a cardiologist and there should be a link between the condition, the medication By being able to have that, each of those pieces of data that you gather actually becomes an intelligent link, depending on how sophisticated your system is and how sophisticated the vendor or the people that you use have it. But this can do a tremendous amount for your overall business ability to be able to drive it right to the bottom line. Ultimately, that’s what we’re here for, to figure out what can we glean from a meeting, what’s new in the industry to be able to What’s the same? Well, the same is these APS summaries, they’ll speed up cycle times, improve risk analysis, increase producer profitability and productivity and meet the requirements of the carriers if they’re there. Let’s zoom through because I’m sure a lot of this is stuff you guys know or will be able to find out by going through some other focus sessions or various different information that you can read up on. Life expectancy underwriting while the same is really quite different. It looks at a series of debits and credits to be able to take the data, put it over there into a form and for the life expectancy carrier, whoever that is, whether it’s a 21st who I’m sure you’ve all been hearing about or whatever the other carriers are, to be able to make that happen. And then put it into the ability to figure out how many months or how many years, what that life expectancy is. Here there is no incentive for the client not to divulge, if anything, the more they divulge the better off they are and the more they happen. Sometimes you’ll find that people all of a sudden start to divulge things that perhaps wasn’t necessarily there. All of a sudden my mother-in-law comes over, I have a little Life expectancy underwriting. We’ve got the underwriting piece of it and we’re going to talk about it, and we’re going to talk about how to dissect and understand a Life Expectancy (LE) report. We have an example of an LE report over here, I’m just going to blow through this, it’s on the slides if you want to be able to see it. The various different factors that go into play like the healthcare, the financial consideration, and all the risk components that go into making an intelligent decision. Let’s take a look at an example of a life expectancy report. How many of you have actually seen one of these? Less than half the room. What it does is it looks at 1,000 lives and says if we were to look at 1,000 lives of a similar condition, at what point out in the distance would 500 of them die? That Look at some of the tools we have over here. You’ve got the age, the date, and the range that it covers, the 1 to 2 to 5 to 8 which would be the range of medical records. You’ve got your mortality multiplier which is a key number. The mean and the median life expectancy values and that’s typically in months and years. And then we can look at the actual medium by where the average person would be and where our proposed insured or in this case, our insured Let’s kind of go through a couple of these definitions so we can help you define and I can’t really see what I’m looking at over there. That says the mean expectancy, what would happen where you go in and you take a population, I defined that before. You take a population of 1,000 and you look at the point at which 500 are anticipated to have died, and that becomes your mean number. Your mortality multiplier which we just saw was 1.6 is a measure of the degree of adjustment made. A standard mortality multiplier would be a 1.0 mortality multiplier to be able to make that, here’s my guy based on a nonsmoker, 71- year-old, with no conditions. As you put the conditions over there, the life expectancy keeps going up with the more conditions that go up there. A reference mortality table is a table by which the actual calculations are made. There are tobacco tables and there are non-tobacco tables and they each take into a fact their mean information based on the same calculator and a standard table would be how they would go without their debits. I don’t know how many of you have heard but there have been some recent changes to the way the calculators are made and we’re going to go through this quickly and you can take a look at it. The impact of the 2008 DBT tables against the 2001 tables actually go and take a life expectancy increase of, in this particular case it would have been 13.56 percent and 29 percent to be able to go from the various different regular tables to the new tables. Where is this coming from and why did this happen and where is our industry going with this? What happened was the life expectancy companies, from the way I understand it and the reports that come out, really had no core data, because it’s a relatively new industry, to say can we look at the last 30 years of people that we predicted were going to die and how many have died. It’s new. So the funders and you who are doing all your business within this industry have put money in, but they were, if you would, not such conservative numbers that were there. All of a sudden people are living beyond that set of numbers and then you end up with a situation where the people aren’t dying. The quicker they’re going to die, the more attractive that policy is and the more I would pay for and it ends up that the people outlive that. What 21st and based on their experience and their 2008 VBT tables actually said we need to now go and lengthen the amount of time and become much more conservative in our ability to be able to pick those numbers. The last part of our talk before we get into some of the solutions is the elderly. There’s a funny story a friend of mine actually sent me and apparently it’s a true story. It was a lady by the name of Miss Merv Grazinski from Oklahoma City. Has anybody heard this story? She went out and bought a 32’ Winnebago. True story, it was in the newspapers. She was driving home from her favorite football game, set the cruise control at 70 miles an hour and decides to go to the back to have coffee. She made herself a coffee in the back. I kid you not, this is a true story. While driving on the freeway. Guess what happens? She gets into an accident, she goes right off the freeway and rolls the motor home upside down. So she sues Winnebago because in the instructions nowhere did it say that you cannot go to the back of the Winnebago while driving at 70 miles an hour and make yourself a coffee. She won a new Winnebago and $1.75 million. She wasn’t speeding, apparently you can set the speedometer at 70 in Oklahoma. So Winnebago said just in case one of her relatives decides to buy a Winnebago, we’re putting a line in that you cannot make coffee while driving your Winnebago. And as the story has it, that’s there. I think that’s a wild story, but I also think it kind of starts to talk about some of the cognitive questions and cognitive screening that needs to go into play. What ends up happening is in the elderly we’re seeing an increased population, we’re seeing an increased wealth in the elderly, we’re seeing increased medical records in the elderly. And what we’re seeing is a grouping, if you would, of screening and screening factors that insurance underwriters are starting to look at or looking more carefully, at such as recent cessation of smoking. This includes elderly that drive Winnebagos. Sudden weight loss and that will give you a large indicator that something is really wrong. Would be considered. I don’t know what they’re looking for at the underwriting, but I will tell you on the medical exam forms when you do a questionnaire, the insurance companies say have you lost or gained more than 10 pounds in the last 12 months. That’s their standard default. Exactly the scientific definition would obviously vary by carrier and I’d refer to your particular underwriter. Sudden weight loss, frailty, broken bones. I will tell you that I’m a volunteer New York City paramedic. I used to work on the ambulance as an active paramedic about 22 years ago and I just had a horrible story where an elderly couple was visiting their grandchildren when they just got married. And she had had a recent history of some unexplained falls and she was walking down to an apartment they were staying in, fell down the stairs and ended up with multiple subdural hematomas and now is in a horrible coma and intubated on a respirator, the whole thing, don’t know what the outcome will be. They really look for that, have there been a history of recent falls is a major indicator. Activities of Daily Living (ADL) impairments, Motor Vehicle Reports (MVR) history, this is where your Winnebago lady from Oklahoma would come in on there. MVR history that stands for motor vehicle reports for those of you Work, volunteer, travel schedules where some countries that used to be off limits are now acceptable to insurance companies. Top health conditions that become causes of death for the impairment for the risk class of 65 and over is the vascular which would include the stroke and the cardiovascular for your MIs, for your anginas, for your cerebrovascular accident (CVAs), for your hypoperfusion of your coronary arteries, all sorts of your CAD, coronary artery disease. The cancers, the dementias to include the Alzheimer’s and every various different stage along that which I have to tell you there are some fantastic tests. I don’t know those of you who actually sell long- term care or have seen some of the telephone, like the m-casts and some of the various different cognitive screenings that they do, but there are some really brilliant scientific tests that they can do by having somebody count backward and memorize certain words and have them replay it. They can really get a very good sense as to where people are holding within it. And the influenzas such as the common conditions like we’ve heard, the West Nile and the bird flu and various different things like that. Underwriting tools used. Pulmonary function tests will teach you about the entitle volume capacity when you breathe out and breathe in, chest expansion. Your peak title and the ability basically for someone with a history of Chronic Obstructive Pulmonary Disease (COPD), chronic emphysema, bronchitis, smoking history. Your EGFR to measure the glomerular filtration, kidney output. Serum albumin which are obviously what you have all your insureds or proposed insured do prior to it, make sure that they’re in good shape. So in this case the serum, whether it was the old SMA18 or the SGPT and ALT which are the liver enzymes and everybody knows that good cholesterol and bad cholesterol markings, the HDL, LDL and the ratios. And then the cognitive assessments to be able to go and do this. What’s new? I want to just talk to you, use the last five minutes. Are there any questions before I just, this is my last slide and I’m going to tell you where the industry has been and where you as a group and the carriers that you represent can say enough is enough and what can we expect or look for tomorrow? Any questions before we do that? It’s a great question and the answer is the labs would be better off suited to answer it, but I tell you that the quality of examiners in America (I know I’m on tape, so I’ll be prepared for whatever results happen) stinks. It stinks. If you look at the entire system and compare it to the fact that your one proposed insured is at the mercy of that one examiner who you may or may not know. That examiner may be seeing seven clients, January 8 in the afternoon, and may leave some of them in the car, unspun where that serum gets ruined. Or if it’s spun or if it’s not, the blood is bad it may sit there on a July afternoon while he stops off for a quick hour because his son is in soccer practice and he promised his wife he wouldn’t miss it. There are a lot of factors that go into play and it just makes for bad results. You can end up having somebody who will come back with tremendously high triglycerides but they never had high triglycerides and it was the fault of the examiner. What percentage of it? I don’t know, but I’ll tell you that it’s up there and it happens. Oh sure it does happen. So get it done again. But what happens if your proposed insured is just not interested in having a blood test done a second time and “Says forget about it, I changed my mind on this policy.” And you’ve spent the year working on a commission that you can make $212,000 on but because some guy who’s making $30 on an exam blew it. So what do you do? Shoot him maybe, but shoot him it doesn’t help. I’ll tell you what Bruce does. Bruce will figure out who the best examiner is in that particular area and you’ll all say that. But there’s a major, major flaw in that thought process. There’s a major flaw in that thought process and that is you are probably the number one agent in Manhattan. He knows probably who the best people are in Manhattan, but what happens when Bruce’s client says I’ve got a partner in New Mexico and we’ve got three junior partners, one in Salt Lake City, one is in Albuquerque, and one is in downtown Detroit. That’s a good point. You call Eli and you say you fly a citation jet, I’m going to hire you to take my exams around the country. I would welcome you all to do that. You can call 888-ELI-ROWE, that’s a self promotion and you can do that. But that’s not really going to work because I’m too busy helping out Bruce so I Now the flip side of that, is the insurance company. The insurance company, just so you understand the minds of the insurance companies because I’m really here just to kind of be the conduit so they can understand you, and you can understand them. They know that there are stories like this. When I started in business 20 some odd years ago, when I was kind of leaving being a paramedic and getting into this on the way to medical school and doing my thing, I said, “Lt me go and try and get the business from the brokers. So I’d knock on a broker door, and I’d say I’d really like your business.” And they would say, “We use Susie. Susie does a great job for us. She takes all of our cases.”And I’d say, “please give me your business, I’ll take it.” Invariably what would happen is, one day I’d get a phone call that says, “Eli you want my business, you take care of me, I’ll take care of you.” And I say, “Sure. I’ll take care of you because I’m very hardworking, I’m very happy to please.” So I’m thinking, taking care of your client means you have an invasive cardiologist that works from 3 a.m. to 5 a.m. I’ve got to sit outside his operating room and wait for him and I’ll do that to be able to earn your business. Only the agent’s idea of taking care of them was a little bit different. His client, it’s not very different, was 320 pounds but the insurance company’s tables came in that for the super-preferred he had to come in under 180. Eli, Eli don’t worry about it, I just gained a few pounds but he told me he’s on a diet. Under 180. And my client’s got a little bit of blood pressure, but he’s stressed, you’ve got to understand, he’s stressed. So you’ll take it and you’ll do the right thing by me and I’ll do the right thing by you. So 140/90 I don’t care what you write as long as it’s under 140/90. He’s going to tell you about medicines, but he’s confusing it, that’s his wife’s medicines. He doesn’t really take them. But one more thing Eli, if you can, one more thing. Just do me one more favor, and I’m going to give you all my business, just one more thing. When my client goes to the bathroom, if you don’t mind, just go to the next stall and use your sample. And I say if you don’t mind just hold on one second while I dial 911 on the other line. Ultimately, I don’t know where these guys are today but I know that we, meaning the industry that collects all this date, ultimately represents the insurance carriers, the people you’re dealing with. I’m here 20 years later doing our thing and ultimately you guys are the crème de la crème but there are others that haven’t necessarily given such a great I want to now come back and pose this question and with that we’ll end in a couple of minutes. I want to say if you have the big United States. Clearly, I have artistic talent over here, and Bill Gates calls you up and says I want you to do me a favor. I want to give you the whole Microsoft account. But before we do that, I’ve got my 28 top executives that are all over the country. Take care of those and if you do a great job on those guys, you’re going to end up winning What do you do? Because you know that if one of them gets messed up, this examiner 45 miles southeast of Chicago sits there for 45 minutes in the bathroom while his wife is waiting to pick up the kids from soccer practice, you So does anybody in the room want to propose an answer? I’ll tell you what happens right now. What happens right now is But that’s not really what’s happening. How many of you have your own examiner that has their own jet that flies around the country for you? It just doesn’t happen. What ends up happening is you’ve got a problem, that’s the answer. And nobody has a good solution to this. What you do is you figure out, I’ve got a friend in California, let me call a Top of the Table guy in California and ask him who the best person to use there is. And out of that 28, you may come up with 25 percent of them with good solutions and good suggestions. But you’re still going to end up with some that are no good. Without getting into a long complex presentation on the future state of what you can expect over the next few years, you can look and hope to find, being very careful on how I choose my words over here, hope to find if you would a Travelocity.com type model where you can select the highest rated examiner per geographic region as opposed to saying, if I like Susie on Madison Avenue, well Susie is going to do my case on Madison Avenue, she’ll give it to whichever company she’s aligned with and be able to then filter it down. Essentially 25 percent of the time you may get your best, 25 percent the worst and then 50/50 will be somewhere in the middle. You need a better solution, so look for You’re hoping they’re doing that but each individual company can’t necessarily do it. You’re hoping they’re aligned with a company that can do that. Yes, people have built an examiner selection platform. It’s built, it’s out there. I can’t, we can discuss offline. I can just tell you that’s a solution to be able to Let’s just talk about electronic medical record (EMR) and that cycle of rape, and I think this is key. Right now the doctors have the upper hand. They’ve got your medical records. These companies have them, they wait seven, 10, 15, 18 days. The average APS companies’ turnaround time is 17, 16. I’ve heard 14. I’ve also heard 30. So let’s just say it’s two weeks, plus. There’s no reason why you can’t find a company that will do it in under 10 days by calling every single one every single day by knowing as you suggested, what flavor Dunkin Donuts and I think the real key is going to be instant transmission and instant application. That’s the key, but is anybody doing it yet? So the answer is, Google, Microsoft, a whole slew of small companies have created an EMR, an electronic medical report or record and a PMR which is a personal medical record. Which just takes it to the next level. What we believe the real answer is, is that your carriers should become members in a shared community that encompasses all of these sets of records. So when Bruce applies for an insurance policy, his records are readily available at a shared platform and they could be transmitted through the use of perhaps a summary, this is how you see everything starts to crystalize and come together, where the whole becomes And now they can be transmitted to a carrier for say hey, do you like the following eight points and we have a current set of medical records on file. That’s the beauty, that’s where the new transition is going. That’s where the metamorphosis from the last 30 years. which has really been a God send an examiner, whoever you get, it’s Russian roulette, to make it happen, try to get the records, wait three weeks, do what you can and that’s really going on today. To what’s the next industry, what’s new, what’s exciting. I thank you

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