apistemplate

The Risk-Based Capital Model Governance Task Force formed this spring with a mandate to tackle the crucial, but some say outdated, RBC framework.

That effort officially launched July 3 with a task force memo requesting comments on a “proposed preliminary [RBC] principles and questions.”

RBC is a method used by regulators to ensure that insurance companies hold enough capital to support the risks they take on. It helps protect policyholders by reducing the likelihood of insurer insolvency.

Executives, as well as Wall Street analysts, prefer to operate insurance companies with an RBC ratio of 400% to 450%. But the original RBC concept dates to the 1990s and does not account for 2025 realities, said Larry Rybka in a comment letter submitted Tuesday.

“The entrance of private-equity sponsors into the insurance marketplace, combined with sophisticated reinsurance structures, has created new and material solvency risks that the current formula does not adequately capture,” wrote Rybka, chairman and CEO of Valmark Financial Group.

“This needs to be fixed because NAIC ineptitude is on full display in letting PHVL burn to the ground, and policyholders will only get the minimum state guarantee,” Rybka said in a follow-up interview.

Connecticut insurance regulators are overseeing PHL Variable following the discovery of significant financial difficulties. Insurance Commissioner Andrew Mais recently asked the court to loosen a moratorium on policyholder benefits while regulators court buyers for PHL blocks.

By the beginning of 2024, private equity firms owned approximately $700 billion in insurance assets, or 7.1% of the insurance industry, according to the National Association of Insurance Commissioners. That figure is up from 5% in 2019.

Meanwhile, U.S. life insurers have nearly doubled their ceded reserves since 2019, increasing from $710 billion to $1.3 trillion in 2023, Fitch Ratings noted in a recent report. During the same period, reserves ceded to offshore jurisdictions nearly quadrupled, exceeding $450 billion.

“Far from dispersing risks, some of these transactions concentrate it in thinly-capitalized entities that are opaque to U.S. stakeholders,” Rybka wrote. “Current RBC rules afford full credit for reinsurance recoverables irrespective of the reinsurer’s financial strength, thereby permitting capital arbitrage and the upstreaming of hard capital even as risk increases.”

‘Signalizes the priority’

The RBC task force was established in February by the NAIC. It immediately garnered attention as a serious effort.

“The fact that the [task force] has been established by the NAIC Executive Committee signalizes the priority that is being given to the risk-based capital system at the highest levels of the NAIC,” the law firm Mayer Brown wrote. “Also significant is the fact that state insurance commissioners (and not just their staff) are participating directly in the work of the task force.”

A pair of influential commissioners lead the task force: co-chairs Ohio Director of Insurance Judith French, who also chairs the influential Life Insurance and Annuities Committee, and Wisconsin Commissioner of Insurance Nathan Houdek, who also chairs the Financial Condition Committee.

Comments are being accepted through July 24 on the task force’s RBC principles and a list of 10 questions. The questions cover the gamut of risk, capital, and level of analysis.

Meanwhile, the Capital Adequacy Task Force recently considered a proposal to discourage insurers from releasing RBC figures.

Four-point plan

Rybka offers some pointed suggestions in his letter, four of them:

Stricter capital requirements for reinsured liabilities. Require higher RBC charges for liabilities ceded to reinsurers that fall into one of three categories: Not licensed in the United States, not subject to equivalent regulatory oversight, or not fully collateralized.

Enhanced transparency of reinsurance arrangements. Mandate detailed public disclosure of reinsurance counterparties, contractual terms, or any parental guarantees or side agreements.

Limits on the use of reinsurance for capital arbitrage. Adopt a clear substance-over-form test for risk transfer and deny RBC credit where that test is not met.

Appropriate capital treatment for complex credit structures. Assign higher RBC factors, or explicit capital add-ons, for exposures to below-investment-grade corporate debt held via CLOs, BDCs, and other unconsolidated vehicles.

Rybka said he does not expect the task force to adopt any of his suggestions.

“I want to be on the record pointing to the NAIC’s inaction before the next larger carrier fails,” he said. “Who knows, this letter may end up as something referenced if a crisis finally forces the federal government to intervene.”

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Matthew Motil, host of the podcast “The Cash Flow King,” was sentenced to 70 months in federal prison on Friday for orchestrating a real estate Ponzi scheme that scammed $7.3 million from at least 63 victims.

Motil, 45, of North Olmsted, Ohio, was a licensed real estate agent who owned and operated several companies from October 2017 to March 2022. He devised a scheme to defraud investors by using his podcast and other marketing tools to position himself as an expert in the field, court documents say.

Branding himself as the “Cash Flow King,” Motil produced and hosted programs which he promoted through social media and his websites. He also authored a book, “Man on Fire,” to further his credibility with investors, the U.S. Attorney’s Office for the Northern District of Ohio said in a news release.

Using a combination of marketing tactics, he solicited prospective investors to invest their money with him and his real estate companies as a lucrative way to generate passive income. Motil provided the victim investors with promissory notes that he claimed were secured by mortgages on properties located throughout Northeast Ohio, court documents say.

Unbeknownst to investors, he used the same properties over and over to obtain money from one victim after another, each time providing them with a promissory note purportedly secured by a mortgage. Each victim believed that they were the sole mortgage holder of the investment property and that they would be able to recover their investment through foreclosure if Motil failed to make the payments he promised, court documents say.

Ponzi scheme revealed

Motil deflected mortgage questions from investors by saying that there were long processing times. As he convinced more people to invest with him, he used those new funds to pay earlier investors to keep the Ponzi scheme going.

According to the Securities and Exchange Commission’s complaint, Motil scammed “Investor A” out of more than $577,000, “virtually all of Investor A’s life savings and retirement funds.” At one point, “Investor B” told Motil that “he needed to receive his overdue payments because he was being deployed to Afghanistan and would not be able to communicate from there.” “Victim C” was a cancer researcher in Florida.

“These victims were deceived and manipulated into handing over their hard-earned money to a shameless and selfish individual for his own benefit,” said acting U.S. Attorney Carol M. Skutnik for the Northern District of Ohio. “Our office will take action to prosecute anyone who preys on the trusting nature of others.”

Motil also used the victim investors’ money to fund his lifestyle. He funded personal expenses such as leasing a large home on Lake Erie and securing courtside seats to Cleveland Cavaliers home games. He also used the funds to pay his credit cards and financially sustain his fitness businesses.

“The 63 victims of this investment/Ponzi scheme are at the forefront of our work, and this conviction reflects our steadfast commitment to justice on their behalf,” said U.S. Secret Service Special Agent in Charge Blaine M. Forschen for the Cleveland Field Office. “Together with our federal, state, and local partners on the Secret Service Money Laundering Task Force, we will continue to protect our communities from those who exploit trust and inflict financial harm.”

Motil pleaded guilty to securities fraud and wire fraud on Sept. 5, 2024. Motil was also sentenced to serve three years of supervised release after imprisonment and pay $5,085,247.08 in restitution.

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The Federation of Americans for Consumer Choice will appeal a mixed ruling that keeps alive the Department of Labor’s fleeting attempts to reinterpret fiduciary duty.

District Judge Ed Kinkeade accepted the 2023 findings and recommendations of a U.S. magistrate judge, who concluded that portions of the DOL’s guidance under Prohibited Transaction Exemption 2020-02 exceeded the agency’s authority and were “arbitrary and capricious.”

Kinkeade’s order vacated specific rollover-related provisions, including the rule allowing a single IRA rollover to be considered the start of an ongoing fiduciary relationship.

While the ruling strikes those components from PTE 2020‑02, Kinkeade did not dismiss the DOL’s entire rule. Other portions remain in effect. With its lawsuit, FACC hoped to strike the entire rule, following the Court of Appeals for the Fifth Circuit’s decision to toss out a previous 2016 fiduciary rule.

“FACC views the decision as a mixed bag because the decision guts an essential element of the guidance and thus demonstrates the guidance is flawed. However, FACC respectfully submits the Judge is wrong in failing to see that other aspects of the guidance are inconsistent with the Fifth Circuit decision,” said FACC CEO Kim O’Brien in a statement.

“FACC notes that Judge Kinkeade merely adopted the recommendations of the Magistrate Judge without further rationale but the rationale provided by the recommendations was seriously flawed and should not be allowed to stand.”

A pair of challenges

The DOL’s latest fiduciary expansion effort — titled the Retirement Security Rule — was crafted under the Biden administration to take effect in September 2024. Two lawsuits tied the rule up in two Texas courts, which granted stays in the summer of 2024.

In April, the Fifth Circuit granted the DOL 60 days to consider its stance on the latest version of the rule. Since the Trump administration took over, the DOL has not said if it will continue to appeal the lower-court rulings.

Plaintiffs in both lawsuits say that any DOL rule must adhere to precedents set by the Fifth Circuit ruling.

With that decision, a three-judge panel ruled that the 2016 rule strayed too far from the common-law definition of the term fiduciary, which hinges on the existence of a relationship of “trust and confidence” with the client. Agents who merely sell products to their clients do not have this relationship, the court concluded.

“FACC believes the time has come to resolve these issues after 15 years of legal wrangling so government resources can be better focused on helping and encouraging Americans to save for retirement,” O’Brien said. “That is what really matters, which can be best achieved by respecting the multi-faceted financial service marketplace designed to provide consumers with choices in pursuing their financial security.”

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The 24 million Americans who obtain health insurance through the Affordable Care Act marketplace will have to dig deeper into their pockets for coverage next year.

Insurers are proposing the highest premium increases in five years, with a median premium hike of 15%, according to an analysis for the Peterson-KFF Health System Tracker covering 19 states and the District of Columbia.

Compare this to 2025, when health insurers had a median proposed increase of 7%.

Insurers who sell coverage on the ACA exchanges are facing headwinds from two sources: rising costs and usage, and uncertainty over whether Congress will allow COVID-19-era ACA tax subsidies to expire at the end of 2025.

These are initial numbers and insurance commissioners in some states may alter requests before approval.

Still, “it’s the biggest increase we’ve seen in over five years,” said analysis co-author Cynthia Cox, a KFF vice president and director of its Program on the ACA.

Premiums will vary based on where consumers live, the type of plan they choose, and their insurer.

The KFF report said several factors are driving proposed premium increases. For example, insurers say underlying medical costs — including the use of expensive obesity drugs — will add about 8% to premiums for next year. And most insurers are also adding 4% above what they would have charged had the enhanced tax credits been renewed.

Tariffs also could be a factor in higher proposed premium, KFF said. Tariffs could drive up the cost of some drugs, medical equipment and supplies. Some insurers report that tariffs — and the uncertainty around them — are driving rate increases about 3% higher than they otherwise would be.

Future of enhanced ACA tax credits in question

A big question in all this is whether Congress decides to extend more generous tax credits first put in place during President Joe Biden’s term as part of the American Rescue Plan Act in 2021, then extended through the Inflation Reduction Act in 2022.

Those laws raised the subsidy amounts people could receive based on their household income and local premium costs and removed a cap that had barred higher earners from even partial subsidy assistance. Higher earners could still qualify for some subsidy but first had to chip in 8.5% of their household income toward the premiums.

Bigger subsidies helped fuel record enrollment in ACA plans, especially among lower-income policyholders.

But those enhanced subsidies are also costly. A permanent extension could cost $335 billion over the next decade, according to the Congressional Budget Office.

Consumers will learn their new premium prices only late in the fall, or when open enrollment for the ACA begins on Nov. 1 and they can start shopping around.

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Cerulli Associates anticipates that $124 trillion in wealth will transfer through 2048. The company notes that as the number of wealth transfers accelerates, it is important for wealth managers, asset managers, and other industry participants to follow best practices with current relationships while shifting their service and product strategies to the future profile of the high-net-worth demographic. This is according to The Cerulli Report: U.S. High-Net-Worth and Ultra-High-Net-Worth Markets 2024.

Who is getting what?

So, who will receive what in this great transfer of wealth, and when will they receive it? Overall, in the next 25 years, Cerulli projects that there are multiple demographic groups that stand to benefit from record levels of wealth transfer, said Chayce Horton, senior analyst at Cerulli. Spouses and significant others will be in line to inherit over $50T in wealth in the next 25 years, and the vast majority of this amount will be going to women.

When that wealth eventually transfers down to next-gen households, Horton said, millennials are expected to inherit the most–$46T, though most of this transferring will take place in the 2030s and 2040s. “In the next 15 years, Gen X households will be the largest recipients of intergenerational wealth transfers, while ultimately receiving nearly $40T in wealth in the next 25 years,” he said.

Helping clients transfer their wealth

And what are some of the best practices that financial advisors and wealth managers can use to prepare their current clients to pass on their wealth? Advisors play many roles in preparing their clients for intergenerational wealth transitions, Horton said. “Advisors must foster effective communication and provide in-depth education and guidance when working with clients and their families as they assess the multitude of estate planning options,” he said. “Through this process, advisors play a key role in cultivating a network of multidisciplinary experts who can assess each client’s unique needs.”

In addition, Horton said, “advisors can play a key role in preparing potential recipients of wealth with communication, education, and by providing complimentary planning services that can increase the continuity in the advisory experience across generations.”

Building successful relationships

The survey also said that millennials will be inheriting the most of any generation over the course of the next 25 years ($46 trillion). And Gen X stands to inherit the greatest portion of assets in the next 10 years, totaling $14 trillion, compared to millennials’ $8 trillion.

When asked how managers and advisors should position themselves to build successful relationships with these groups, Horton said that “the most important thing to understand is that the vast majority of wealth transfers come when the current owner passes away, and the vast majority of wealth in those scenarios goes down to their children. As the children of parents passing away are generally in their 50s and 60s – these are going to be a large cohort of wealth recipients, and this has significant implications.”

“This means that we need to rethink our definition of ‘next-gen’ to skew much older,” Horton pointed out. “And in rethinking these ideas, the industry needs to recognize that by the time a wealth transfer occurs, the recipient is likely to already have an advisory relationship.”

“With this in mind,” Horton added, “it’s not necessarily about serving one generation or another –but for the industry to think more concertedly about serving the needs of adults in their ‘sandwich’ years (40s-50s), when they are increasingly facing responsibilities for their parents while simultaneously retaining responsibility for their children. Advisors that can provide value to those in this stage will see the most benefit from the tailwinds of the great wealth transfer.”

The survey also pointed out that developing relationships with clients’ spouses or children is a top long-term growth strategy among high net worth practices, as the prospect of wealth moving from primary clients to spouses and children becomes ever more urgent. Conducting family meetings and maintaining a regular cadence of communication amongst family members is a key best practice, according to 89% of firms that were surveyed by Cerulli in 2024.

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The SECURE Act changed the rules for many individuals who inherited individual retirement accounts. However, even though SECURE took effect five years ago, advisors continue to receive questions from clients about IRS regulations that complicate the rules for certain classes of IRA beneficiaries.

Jay Kautt, vice president of advanced market sales with Athene USA, discussed IRA beneficiary rules after SECURE during a recent webinar for the National Association for Fixed Annuities.

SECURE limited the ability of some inherited IRA beneficiaries to stretch their distributions from the IRA. Non-eligible designated beneficiaries and non-designated beneficiaries are restricted in their ability to stretch distributions beyond 10 years. Eligible designated beneficiaries, such as spouses, are still able to do the inherited stretch.

Kautt broke down who is eligible to stretch and who is restricted, and what advisors must know to keep IRA beneficiaries from running afoul of IRS regulations.

Five classes of beneficiaries who are eligible to stretch are spouses, individuals who are disabled at the time of the IRA holder’s death, individuals who are chronically ill at the time of the IRA holder’s death, a beneficiary who is not more than 10 years younger than the IRA holder, and minor children of the IRA holder.

Kautt described a few twists in the rules pertaining to these eligible designated beneficiaries.

A minor child can take required minimum distributions on the inherited IRA based on their life expectancy until they turn 21. After that, the 10-year rule kicks in and the entire IRA account must be emptied by the year in which they turn 31.

As for the eligibility of beneficiaries who are not more than 10 years younger than the IRA holder, beneficiaries who are older than the IRA holder are also eligible to stretch the IRA. This rule often applies when an IRA holder’s siblings inherit the account, Kautt said.

A spouse who inherits an IRA has several options available, Kautt said.

“A spouse has the unique ability to take an inherited IRA and treat it as their own; it’s as if the deceased IRA holder never existed,” he said.

The spousal beneficiary isn’t required to take RMDs from that IRA until they reach the applicable age for taking them. However, if the beneficiary is younger than age 59 ½, they are subject to a 10% penalty if they take money out of the IRA.

Looking at a hypothetical example of a 50-year-old woman who inherits her husband’s IRA, Kautt provided several options for her.

She can leave the IRA in inherited status, have access to the funds free of penalty and not have to take an RMD until the original owner would have reached his applicable age. The IRS placed no time limit on her ability to move that IRA from inherited status to her own account.

She can leave the IRA in inherited status until she turns 59 ½ and then retitle it to her own account. Kautt said there are several advantages of doing this. Now she knows exactly when RMDs start – when she turns 75. The beneficiaries of this IRA now will be primary beneficiaries and not successor beneficiaries of an inherited IRA. In addition, she is free to convert the account to a Roth IRA after she retitles it as her own. An inherited IRA cannot be converted to a Roth IRA.

Non-eligible designated beneficiaries

Anyone who is not an eligible designated beneficiary is subject to the 10-year rule, Kautt said.

The IRS changed the rules requiring certain beneficiaries to be subject to annual RMDs in years 1-9 and the 10-year rule. The final regulation issued in 2024, bifurcates the 10-year rule based on the age of the IRA holder at death. The key is the IRA holder’s required beginning date, which is April 1 of the year after the IRA holder reaches the age when their first RMD is due.

If the IRA holder died prior to their required beginning date for taking RMDs, the beneficiaries are subject to the 10-year rule, are not required to take annual RMDs but must liquidate the entire account balance by the end of the 10^th year following the IRA holder’s death. If the IRA holder died on or after the required beginning date, the beneficiaries must take annual RMDs in years one through nine, and the entire account balance must be liquidated by the end of the 10^th year following death.

One distinction pertains to beneficiaries of Roth IRAs, Kautt said. Roth IRAs do not have a required date to begin taking RMDs, therefore, beneficiaries do not have to take RMDs from the account. However, the Roth IRA account must be liquidated by the end of the 10^th year following the original account holder’s death.

Successor beneficiaries of an inherited IRA are no longer able to continue a life expectancy stretch of that IRA; they are limited to 10 years or less. If the original IRA holder died on or after Jan. 1, 2020, the successor beneficiary steps into the shoes of the inherited IRA holder and has only what is left on the original 10-year period before having to liquidate the account. If the successor beneficiary inherited the IRA from an eligible designated beneficiary, they have the full 10 years before having to liquidate the account.

Non-designated beneficiaries

Non-designated beneficiaries are charities, estates and nonqualifying trusts, Kautt said. These beneficiaries do not have a life expectancy; therefore, SECURE didn’t change the rules regarding inherited IRAs.

If the IRA holder died prior to the required beginning date, the non-designated beneficiary must liquidate the account within five years. If the IRA holder died on or after that date, the beneficiary must withdraw funds based on the “ghost” life expectancy of the original account holder.

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Grappling with financial obligations and professional commitments, many consumers in their 40s and early 50s may not be thinking of purchasing long-term care insurance (LTCI), but savvy agents and advisors know that it may be in their best interest to take a serious look at LTCI and the many benefits it provides. Craig Roers recently shared some helpful tips and ideas that financial professionals can use to increase their chances of selling LTCI to their younger prospects and clients.

Working with clients and prospects

Roers, who is marketing manager at Thrivent, pointed out that it is not uncommon for younger clients to put off extended care planning. This is because they’re often focused on other financial priorities, like buying a home, paying off student loans or raising young children. “However,” he said, “it’s a good idea to encourage your clients to start thinking about extended care planning earlier in their financial journey, rather than waiting until it becomes urgent.”

Roers then shared three tips that Thrivent encourages financial advisors to take when helping their younger clients or prospects incorporate extended care planning into their financial strategy. They are:

1. Reinforce the importance of a written strategy: “A written strategy for extended care outlines preferences for where care will happen, who will provide it, and how it will be funded.”
2. Show them the risks of longevity: Most financial advisors plan for retirement income to last until age 95 for their clients, even though the average life expectancy in the U.S. is under 78. But the average health span — years lived in good health — is just under 64. “This reinforces the need for extended care planning,” Roers said. “Clients could potentially live with a chronic condition for years, and if not addressed, rising care costs could threaten their financial plan and long-term goals. “Personalize the message for your clients – ask them to consider their family history and possible future health risks. This may help them see why planning sooner matters.”
3. Explain how time boosts affordability and insurability: Clients buy insurance with their age and health—two key factors in pricing and eligibility, Roers said. Help younger LTCI prospects and clients “understand that the earlier they apply, the higher the likelihood they’ll benefit from lower premiums and better underwriting. Explain to them that waiting to act now can lead to higher costs and a greater risk of becoming uninsurable,” he added.

Financial advisors can also encourage younger LTCI prospects and clients to choose accelerated payment options—like Pay to 65, 10-pay, or 20-pay, so that LTCI premiums are completed before they retire. “This makes it easier to fund coverage during peak earning years and avoid paying premiums during retirement,” he said.

Roers pointed out that one of the most important things for financial advisors to remember is that extended care planning is an ongoing conversation. Because younger clients are usually focused on other life milestones, early planning can feel unnecessary. “By bringing it up early and regularly – whether during annual reviews and other touch points throughout the year – you can help clients see the immense value of extended care planning and help them build it into their overall financial strategy,” he said.

The appeal of combination products

To increase their chances of success, agents and advisors might also want to offer products that hold a special appeal to younger clients: combination products. Research from LIMRA suggests that interest in life combination products is high among millennials. The 2024 Insurance Barometer Study from LIMRA and Life Happens shows that almost 4 in 10 (39%) Millennials are very likely to consider buying a life combination product, compared to 27% of Gen X and 17% of Baby Boomers.

Whereas older adults may expect Medicaid to cover their long-term care, Millennials are more likely to view a life combination product as a one-stop shop to secure both life coverage and long-term care insurance, the LIMRA report said.

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Dick Weber first encountered Joe Belth in 1979 after a Million Dollar Round Table presentation in which Weber stated that “fewer than 1% of all term insurance is in force at the time of death.”

The ever-inquisitive Belth quickly reached out to Weber, then a successful life agent and currently president of The Ethical Edge, Inc. By that point, Belth had been researching, writing and editing his The Insurance Forum monthly publication for more than five years.

“He wanted to know where I had gotten that statistic,” Weber recalled Wednesday. “He wasn’t challenging the veracity; he just wanted me to quote my sources. That challenge helped me become more diligent about verifying sources.”

It would also begin a decades-long correspondence between the two men. Weber is just one of many life insurance industry titans who respected and relied on Belth’s persistent research over his 70-year career.

Belth, 95, died Saturday.

“Joe was thoughtful, diligent, and fiercely dedicated to getting to the substance and truth of any insurance issue,” Weber said. “I’ve had a number of mentors throughout my 58-year career in the life insurance industry, but none as rewarding or over such a long period of time as the relationship with Dr. Joseph Belth.”

Started at the bottom

Belth held degrees from Auburn (N.Y.) Community College (now Cayuga Community College), Syracuse University, and the University of Pennsylvania. At Penn he was a fellow of the S. S. Huebner Foundation for Insurance Education.

He got his start in the business on the ground floor, working as a life insurance agent for Continental American Life Insurance in Syracuse for five years in the 1950s. The 1960s saw Belth transition to insurance education.

He became a professor of insurance at Indiana University in 1962 and would teach there for decades. About 12 years later, the first copies of The Insurance Forum fanned out across the industry.

The idea grew out of 31 “incidents of censorship by insurance trade magazines, professional journals, and professional organizations” over an eight-year period, Belth would explain. His “sole objective” was to create a vehicle that would allow him “to communicate with individuals and organizations in the insurance business without censorship.”

Issue No. 2, from February 1974, featured such headlines as: “The Plight of Manhattan Life’s Substandard Policyholders,” “What Fidelity Union Life is Doing to College Students,” and “A Conflict-of-Interest Situation for College Professors.”

And Belth was off and running. He edited the publication for its entire 40-year run and authored Life Insurance: A Consumer’s Handbook (1973, revised in 1985), The Insurance Forum: A Memoir (2015).

“We lost a great one,” said Larry Rybka, chairman and CEO of Valmark Financial Group in Akron, Ohio.

Life as a blogger

Belth spent the last act of his long career writing steady blog posts at his eponymous site. Starting in October 2013, Belth wrote roughly one post a week, sometimes more, on the biggest issues facing the life insurance industry, with an occasional non-industry book review mixed in.

Belth tackled long-term care pricing, stranger-owned life policies, annuity exchanges and other controversial topics. Executive salaries were a consistently favorite subject and Belth published as many details as he could get.

George Pickett first heard of Joe Belth when he spoke at Pickett’s chartered life underwriting conferment in Bryn Mawr in 1972. Like many others, Pickett would exchange periodic communications with Belth for decades to follow.

“He was viewed by companies as a pain in the butt because he asked hard questions in the interests of policyholders, and he put companies in print either answering or not answering his hard questions,” said Pickett, principal at The Centerpoint Group, a Flowood, Miss., financial firm.

As Belth and his wife Marjorie aged, he would often use their experiences with life insurance and retirement and the basis for a blog post. The couple owned nine life insurance policies and the “Age 100 Problem” fueled some of Belth’s best late-life writing.

Belth sought to answer whether a policyholder would incur a large income tax obligation if he survived to the policies’ terminal age of 100 and received the face amount himself. As was typical of his academic approach to problems, Belth presented the question to the CEOs of 20 different life insurance companies and reported on the nine responses he received.

He later conducted similar surveys and incorporated the Belths’ situation into his blog posts on the topic. The couple celebrated their 70th wedding anniversary in June.

“We are in our 80s. The cash values are getting close to the face amounts,” Belth wrote in an Oct. 15, 2018 post. “Therefore, because the protection component of each policy (the face amount minus the cash value) is small, we now have little protection. We no longer need the protection, but we need to plan for the disposition of the policies.”

‘Joe Belth didn’t mess around’

Sheryl Moore, CEO of Moore Market Intelligence and Wink, Inc., also identified Belth as a mentor and “the ultimate researcher” in the life insurance business.

“Anyone who received that peach-colored newsletter each month knew that Joe Belth didn’t mess around,” she said in a Tuesday LinkedIn tribute. “He found all of the ugly things in life insurance and exposed them.”

For The Insurance Forum, Belth received a George Polk Award in 1990 in the “special publications” category. He received the 2017 John Newton Russell Memorial Award in recognition of a lifetime of professional excellence, service to the life insurance and financial planning industry, and commitment to ethical conduct.

“Dr. Belth has dedicated more than 50 years of his life to providing high-quality insurance education to the American public,” said Paul Dougherty, then-president of the National Association of Insurance and Financial Advisors. “During that time, he has also given back to our great industry by volunteering his time, insights and energy.”

For one of his books, Participating Life Insurance Sold by Stock Companies, he received the 1966 Elizur Wright Award for outstanding original contribution to the literature of insurance. He received a 1999 Huebner Gold Medal for distinguished service to education and professionalism.

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Most financial advisors (85%) are working with clients who have caregiving responsibilities, according to a study from Edward Jones in partnership with Morning Consult. And an even greater number of advisors (88%) agree that caregiving is more financially challenging than their clients expected.

So, what are some of the most common financial challenges often faced by caregivers?

According to Ken Cella, principal and head of external affairs at Edward Jones, caregiving is not only emotionally taxing, it can be financially challenging as well. “Our recent study identified rising costs and inflation (56%) and inadequate retirement savings (42%) as the most common financial challenges that caregivers face today,” Cella said. “A story we hear all too often is that caregivers need to dip into their own retirement savings simply to keep up with these rising expenses, which jeopardizes their financial security.”

The impact of these challenges

Caregiving comes with real, unexpected consequences, Cella said. “Our study found that nearly all caregivers (95%) have some level of financial concern for their retirement. It’s common for
caregivers to make financial sacrifices to ensure they are providing the best care possible for
their loved ones. In fact, the survey found half of caregivers (51%) have had to cut back on
personal spending due to their caregiving responsibilities,” he added.

Some caregivers are even willing to sacrifice their own careers to ensure proper care for their recipients. This could mean stepping away from their jobs entirely or reducing the number of hours they work, resulting in less pay, decreased savings and losing access to benefits. “These lasting financial and career impacts could take years to recover from,” he said.

Call for legislative changes

Cella added that when Edward Jones surveyed financial advisors, an overwhelming majority (88%) of them agreed that caregiving is more financially challenging than their clients expected. They also agreed that those in this essential role are not only at a financial disadvantage, but the government is also not providing them with the support they need to achieve their long-term financial goals. As a matter of fact, Cella said, more than two-thirds of Americans (68%) overall feel the government is not doing enough to support caregivers.

Cella added that Edward Jones is proud to support the Improving Retirement Security for Family Caregivers Act and the Catching Up Family Caregivers Act. These acts are sponsored by Sens. Susan Collins, R-Maine, and Mark Warner, D-Va., and Reps. Brittany Pettersen, D-Colo., and Maria Elvira Salazar, R-Fla., to help the millions of Americans who provide caregiving services to family and friends. Cella said these bills would build on the success of the SECURE 2.0 Act by providing additional savings opportunities to caregivers.

Helping caregivers navigate their challenges

So, what can financial professionals do to help caregivers navigate these challenges, support their loved ones, and still make meaningful strides towards securing their financial future? Achieving financial stability takes time, Cella pointed out. It isn’t an overnight process. Financial professionals can help caregivers navigate these challenges by guiding them step by step to make thoughtful choices and help them stay committed to their long-term goals. He pointed out that nearly all caregivers who work with a financial advisor (93%) report feeling more confident about their financial future.

The data speaks for itself when it comes to proving the value of a financial advisor specifically. Financial advisors should be viewed as a utility player on a sports team, playing several positions competently, Cella added. “Financial advisors provide a wide array of support, education and resources. They can work with caregiver clients and help connect them to the right resources. This can help caregivers support their loved ones while making meaningful strides toward securing their financial future,” he said.

Tools to support caregiving clients

The study pointed out that advisors are an important resource for caregivers because they support clients who are navigating caregiving responsibilities and they can help ease the financial burden—whether through retirement savings tools, insurance policies or government assistance programs.

In fact, according to the study, half of the financial advisors surveyed agreed that the following tools are some of the most effective when advising caregiving clients:

• Health Savings Accounts (HSAs) (51%)
• Long-term care insurance policies (51%)
• Roth or traditional IRA strategies (50%)
• Government assistance programs (50%)

The survey was conducted by Morning Consult among a national sample of 205 financial advisors from February 28, 2025 to March 11, 2025. In this study, “caregiving,” refers to unpaid care and support provided to a young child, family member, or friend due to age, illness, disability, or other needs. This may include helping with daily activities, managing finances, providing transportation, or offering emotional support.

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A series of alarming reports and dire headlines have raised the specter of a new financial crisis — this time triggered not by banks or exotic securities, but by the insurance industry.

Climate change is the ultimate bugaboo, but soaring insurance premiums, shrinking coverage and insurers retreating from vulnerable regions have left millions of homeowners struggling to secure or afford basic protection. Could this spiral into a systemic threat to the economy?

The dreaded scenario goes like this: As property/casualty insurers continue to retreat from areas considered too risky to insure, property values will fall as more homes and businesses become uninsurable. That, in turn, will reduce property taxes, putting pressure on local governments. Without available insurance, mortgage sales plummet and the housing construction market, already facing rising costs from inflation and tariffs, will collapse. Mortgage failures will increase as people simply walk away from their uninsurable homes, spiking huge banking losses and blighting neighborhoods.

Some experts, such as consumer advocate Douglas Heller, warn that the insurance crisis has already begun to destabilize housing markets and risks tipping into a broader calamity.

“Insurance is kind of the oil that greases the economic engine of homeownership,” said Heller, director of insurance at the Consumer Federation of America. “When insurers pull back, you not only leave families exposed, but you also undermine the mortgage market and the broader economy.”

A ‘more subtle’ path toward disaster

Heller pointed to what he calls a “more subtle” path toward financial disaster. It is not only that some homes become uninsurable, he argued — it is that many policies now offer far less protection than lenders and borrowers believe. As insurers hollow out coverage through higher deductibles, exclusions and actual cash value instead of replacement costs, more homes become underinsured. That is already playing out, he noted, as Fannie Mae and Freddie Mac have eased enforcement of their own insurance standards to avoid mass loan defaults.

Moreover, this underinsurance is not confined to the coastal states commonly associated with climate risk.

“The most expensive homeowner’s insurance in America, after Florida, is in places like Nebraska, Oklahoma and Kentucky,” Heller said, citing billion-dollar hail and wind losses across Tornado Alley. The exposure is so widely distributed, he said, that the risk is systemic, not merely regional.

Indeed, data is already signaling trouble. In Miami, nearly 13% of homes are uninsured, and similar numbers appear in Houston and Detroit.

“You don’t need a hurricane to trigger blight,” Heller said. “A few house fires in uninsured neighborhoods can start the kind of urban flight that devastates communities.”

Insurance regulators are partly to blame

Critics also fault regulators and policymakers for not addressing these trends.

“There’s no question it’s a failure of regulators,” Heller said. “Insurers have become the de facto land use governors of the country, deciding where people can live by deciding where they’ll write policies. Regulators have simply let them walk away from entire communities.”

The first director of the newly established Federal Insurance Office, Michael McRraith, reminded lawmakers as far back as 2014 of the critical relationship of the housing market to the overall economy in testimony before the house Financial Services Subcommittee on Housing and Insurance.

“The [2008-2009] financial crisis demonstrated the importance of the housing finance system to the U.S. national economy,” he said. “Several private mortgage insurers failed or suffered potential financial distress, and the costs of default and foreclosure were shifted to lenders, the government-sponsored enterprises and ultimately the taxpayer.”

The combination of banks being unable to provide funds to businesses, and homeowners paying down debt instead of borrowing and spending, resulted in the Great Recession that lasted 18 months.

Not everyone, however, sees a new looming catastrophe. Federal Reserve Chair Jerome Powell, in testimony to Congress earlier this year, downplayed the systemic risk. While acknowledging the strain on households and regional economies, Powell suggested these are localized issues unlikely to threaten the entire financial system.

Washington pays attention

Some policymakers in Washington have echoed that view. The Fed, under Powell, has dismantled its climate risk infrastructure, withdrawn from the Network for Greening the Financial System, and pushed back on stronger global climate standards. Jayson O’Neill, climate finance senior director of Focal Point Strategy Group, criticized this retreat as “a dangerous abandonment of oversight” in the face of mounting risks.

“The Fed’s position is particularly concerning given the escalating financial costs of climate change, now exceeding nearly $1 trillion annually,” O’Neill said.

Those concerned about systemic risk point to the same mortgage markets that nearly collapsed in 2008. If homeowners cannot secure adequate insurance, lenders may refuse loans or find themselves holding collateral worth less than the outstanding debt. That dynamic threatens not just individual borrowers but the entire housing finance system.

“There’s a scenario here where homeownership becomes an unsustainable feature of the American economy,” Heller warned. “And it won’t just be in Florida or California — it’s happening in the Midwest, in the South, everywhere.”

So what can be done? Heller advocates for stronger regulations to prevent insurers from stripping down policies, for more comprehensive risk pooling to lower costs, and for public investments in mitigation such as better building codes and community resilience. He also calls on insurers to act as partners in risk reduction rather than simply abandoning risky markets.

Some members of Congress agree that intervention is needed. Frederica Wilson and Maxwell Frost, both Democrats representing Florida, have pushed for a federal reinsurance fund to stabilize state markets and keep insurance accessible. Others, however, remain cautious about imposing new regulations on insurers.

For now, the question remains: Is the insurance crisis a slow-moving disaster confined to homeowners and local housing markets, or is it the next systemic shock waiting to happen?

As Heller put it: “We hope we never have to find out. But hope alone is not a plan.”

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