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Click to edit master lead-in head Strength through Innovation Karen Sweeney, Chief Financial Underwriter Kathy Fell, VP & Head of AXA’s Brokerage Underwriting.

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Presentation on theme: "Click to edit master lead-in head Strength through Innovation Karen Sweeney, Chief Financial Underwriter Kathy Fell, VP & Head of AXA’s Brokerage Underwriting."— Presentation transcript:

1 click to edit master lead-in head Strength through Innovation Karen Sweeney, Chief Financial Underwriter Kathy Fell, VP & Head of AXA’s Brokerage Underwriting AXA Equitable’s Underwriting Meets AgencyONE Cat.# (2/13) For Financial Professional Use Only. Not for use with the general public.

2 click to edit master lead-in head agenda – financial due diligence strength through innovation Who We Are What We Do How We Add Value How YOU can help US For Financial Professional Use Only. Not for use with the general public.2

3 click to edit master lead-in head above all else, we need to be good with numbers some simple mental calisthenics to start our session

4 click to edit master lead-in head does anyone have…

5 Click to edit master text style five financial experts with over 75 years of combined insurance experience Develop financial solutions for complicated or unique case designs such as Premium financing and trust- owned coverage Utilize their accomplished investigative skills to access public records and Internet databases Assist with in-house reviews that validate submitted financials which may eliminate the need for additional financial requirements For Financial Professional Use Only. Not for use with the general public.5 who we are

6 click to edit master lead-in head For Financial Professional Use Only. Not for use with the general public6 team structure Mary Bates, Head of Life Underwriting Michael Tunney, Head of Financial Due Diligence Karen Sweeney Chief Financial Underwriter Anna Napoli Assistant Manager Tabatha Johnson, C.P.A. Chief Financial Underwriter Mark Bishop Legal Assistant

7 Click to edit master text style “mature” unit embedded within the Underwriting area to provide guidance regarding case designs, client information, EOLI issues backgrounds include:  Life Underwriting Experience  Certified Public Accountant  Certified Fraud Examiner  Claims Adjudication  Paralegals work in concert with Underwriting Management and Advanced Markets to ensure underwriters have information at their disposal to best assess the cases presented to them more on who we are – AXA Equitable’s unique position For Financial Professional Use Only. Not for use with the general public.7

8 Click to edit master text style additional resource for underwriters to better understand issues that are driving the sale of the policy sounding board for underwriters to discuss items of concern they have identified identify trends in financial underwriting issues, and provide additional training and education to help underwriters better understand the financial presentation of the application verify financial presentation is accurate : allow our Underwriters to spend their time assessing risk what we do - ultimate role For Financial Professional Use Only. Not for use with the general public.8

9 Click to edit master text style getting to “YES” determining premium paying ability estimating net worth legacy planning – thinking about future generations key components for faster track : allow our Underwriters to spend their time assessing risk line: allow our Underwriters to spend their putting theory into action For Financial Professional Use Only. Not for use with the general public.9

10 click to edit master lead-in head case study #1 - things aren’t always what they seem For Financial Professional Use Only. Not for use with the general public.10 Founder and CEO of commodities trading company States annual income is $1,000,000+ Business Tax Returns, page 1, suggest significant losses How does the AXA Underwriter navigate through this presentation? Female, age 49, non-smoker Applying for $30 million, 10 year term policy Purpose of insurance: key person and buy-sell

11 click to edit master lead-in head first glance – 2010 : allow our Underwriters to spend their time assessing risk line: allow our Underwriters to spend their For Financial Professional Use Only. Not for use with the general public.11

12 click to edit master lead-in head second glance – 2011 : allow our Underwriters to spend their time assessing risk line: allow our Underwriters to spend their For Financial Professional Use Only. Not for use with the general public.12

13 click to edit master lead-in head the first clue – income had to be somewhere : allow our Underwriters to spend their time assessing risk line: allow our Underwriters to spend their For Financial Professional Use Only. Not for use with the general public.13

14 click to edit master lead-in head the second clue – balance sheet and partners’ capital accounts : allow our Underwriters to spend their time assessing risk line: allow our Underwriters to spend their For Financial Professional Use Only. Not for use with the general public.14

15 Click to edit master text style : allow our Underwriters to spend their time assessing risk line: allow our Underwriters to spend their Schedule K-1  did not receive any portion of the Guaranteed Payment to Partners  received distributions of nearly $3.2 million in 2011  net capital account totaled over $11 million  additional financial statements showed an additional, wholly owned subsidiary that contributed both annual income and increased equity Result: Financial Due Diligence communicated a comfort level for face amount applied for to the underwriter the deep dive For Financial Professional Use Only. Not for use with the general public.15

16 click to edit master lead-in head case study #2 – finding the money For Financial Professional Use Only. Not for use with the general public.16 Proposed Insured’s net worth: $52 million Annual Income: $1,125,000 Premiums: nearly $670,000 first year; subsequent premiums nearly $300,000 annually Male, age 52, non-smoker Applying for $25 million IUL Purpose of insurance: family protection, income replacement and estate planning Occupation: self-employed real estate development and management In Force Coverage: $9,116,000 (not replacing)

17 click to edit master lead-in head the financial questionnaire : allow our Underwriters to spend their time assessing risk line: allow our Underwriters to spend their For Financial Professional Use Only. Not for use with the general public.17

18 click to edit master lead-in head the tax return : allow our Underwriters to spend their time assessing risk line: allow our Underwriters to spend their For Financial Professional Use Only. Not for use with the general public.18

19 click to edit master lead-in head putting the puzzle together For Financial Professional Use Only. Not for use with the general public.19 Financial Due Diligence used the tax returns as a resource to develop names of business entities through which real estate would be owned by the proposed insured Financial Due Diligence subsequently verifies extensive real estate holdings owned in various LLC names via public information consumer debt of $2,600,000 all paid currently and without history of credit delinquency suggests income well in excess of what the tax returns reflect supporting Schedule K-1s show significant cash flows from business entity distributions and significant partner capital account balances Result: annual income and net worth as reported on the financial questionnaire appear reasonable; concern regarding premium affordability addressed

20 click to edit master lead-in head Two options: Option A: 1040 tax return estimating net worth For Financial Professional Use Only. Not for use with the general public.20

21 click to edit master lead-in head estimating net worth of investment accounts : allow our Underwriters to spend their time assessing risk line: allow our Underwriters to spend their For Financial Professional Use Only. Not for use with the general public.21

22 Click to edit master text style Option B: Use of T option b: T For Financial Professional Use Only. Not for use with the general public.22

23 Click to edit master text style Wages and investment assets estimating net worth with the T For Financial Professional Use Only. Not for use with the general public.23

24 Click to edit master text style Business Interests estimating net worth with the T For Financial Professional Use Only. Not for use with the general public.24

25 click to edit master lead-in head projected inheritance – financial due diligence role For Financial Professional Use Only. Not for use with the general public.25 Guidelines: Generation 1 (G1) must be: a) age 70 or older, or b) under age 70 with evidence of a life expectancy under 5 years Require confirmation that established estate planning is in place that involves transfer of estate to the next generation Verification of net worth of G1 An appreciation factor may be considered on a case-by-case basis (possible 3-5% for max period of 10 years), subject to the structure of the inheritance planning, details of assets to be inherited (value and type of asset), and review by the Financial Due Diligence Team projected inheritance 1+1 = 2 Turn 1 sale into 2 (or more!) AXA Equitable now financially underwrites cases based on the projected inheritance of the Insured The assets of one generation can justify life insurance coverage for the next important

26 Click to edit master text style what is required to confirm established estate plan is in place can be in the form of: a copy of the Irrevocable Trust, if one has been executed confirmation (from attorney or some appropriate third party, not the Proposed Insured) verifying Inheritance to take place in the next 5-10 years; or a copy of Parent's or Bequeather's Will and Estate Planning documentation confirmation guidelines GE

27 click to edit master lead-in head financial case study – projected inheritance For Financial Professional Use Only. Not for use with the general public.27 Proposed Insured’s individual net worth, exclusive of future inheritance, is $20 million Mortality calculation at the Proposed Insured’s age 45, would qualify for a total line of $43 million Bequeather/mother’s net worth is $28 million Mortality calculation at mother’s age 75 qualifies for $27 million which represents son’s possible estate tax liability Male, age 45, non-smoker Applying for $65 million IUL (AXA’s Jumbo Limit) Purpose of insurance, estate planning, Sole heir to his 75-year old mother’s estate Beneficiary is an Irrevocable Life Insurance Trust for the Benefit of the Proposed Insured’s Children, Grantor Mother

28 click to edit master lead-in head financial case study – projected inheritance For Financial Professional Use Only. Not for use with the general public.28 the solution: By adding the current projected death benefit need of the Proposed Insured and the projected future inheritance from the mother’s projected estate need, AXA was able to justify the amount applied for: $65 million Our competition would have allowed only $40 million

29 Click to edit master text style value of anticipation, partnership, and communication cover letters secure complete financial information review finances prior to submission to determine if complete financial picture is being presented secure additional financial Info if it will be required If large % of Net Worth is in Real Estate, secure addresses If large % of Net Worth is in Oil/Gas Royalties, secure valuation information, last royalty check, 1040s, etc. include financial information with Informal Review Process moving things along…faster track GE

30 click to edit master lead-in head agenda strength through innovation Who We Are Special Programs Underwriting Niches Marketing Resources For Financial Professional Use Only. Not for use with the general public.30

31 click to edit master lead-in head AXA Equitable’s most competitive strength For Financial Professional Use Only. Not for use with the general public.31 who we are

32 Click to edit master text style our underwriting teams 80+ Underwriters; average of 20+ years experience Expertise in navigating the grey by taking a holistic approach to underwriting each case Understand the competitive nature of the business Options oriented; solutions driven Dedicated to building and maintaining relationships our workflows Maximize our strong experienced staff, with easy and direct access by phone or For Financial Professional Use Only. Not for use with the general public.32 who we are — underwriting teams Large Case “Concierge Service” and expert case design General Dedicated Relationship Management for a tailored response to individual agency needs

33 Click to edit master text style four medical directors, combined at three sites, with a total of over 40 years experience Committed to research and development of new medical updates keeping our guidance cutting edge All are Insurance Medicine Board Certified each with unique focus and experience Provide holistic training and educational opportunities both internally and externally For Financial Professional Use Only. Not for use with the general public.33 who we are

34 click to edit master lead-in head AXA Equitable retention and automatic limits (standard or better risks – in millions) 1 Lower limits apply to juvenile insurance 2 For policies with increasing amounts, i.e., policies with Return of Premium Death Benefit Rider (ROPR), the ultimate amount per the illustration must be used for retention and automatic reinsurance calculations. 3 For ASUL products, death benefit is limited to our retention. underwriting programs For Financial Professional Use Only. Not for use with the general public. Large Retention Capacity Strong Reinsurance Relationships Highlights: 2

35 click to edit master lead-in head underwriting programs For Financial Professional Use Only. Not for use with the general public.35 predictive analytics “EasyUnderwriting” program AXA is piloting a new underwriting process that uses technology to analyze information application information. This data helps determine the underwriting rate class and opportunity for potential “Jet Issue” Benefits: Faster cycle time for cases that meet predefined criteria Underwriting decisions, on average are made within 3 business days Cases that fit criteria do not require exams and labs An easy, enhanced customer experience Please contact your Underwriter or RVP for further details. important

36 click to edit master lead-in head underwriting programs For Financial Professional Use Only. Not for use with the general public.36 good health credit program (GHCP) Giving credit where credit is due! Can a Proposed Insured with a demonstrated healthy lifestyle get credits to improve his or her overall rating? YES! In fact, eligible Standard cases can move to better than Standard rates. Factors considered include: Favorable cardiovascular risk factors Good preventative medical care Lifestyle changes and improved health habits

37 click to edit master lead-in head underwriting programs For Financial Professional Use Only. Not for use with the general public.37 good health credit program Unlike traditional limiting industry table shave programs, AXA Equitable’ s GHCP allows credits for: All Products Face amount limits — up to available full retention: $20 million individual or $25 million survivorship Both lives on a survivorship policy Cases rated up to Table D

38 click to edit master lead-in head how real is the risk? professional athletes, entertainers and high profile individuals For Financial Professional Use Only. Not for use with the general public. 38 underwriting niches and advantages All Term and Permanent Full Retention Regular Schedule N/A None PRODUCTS RETENTION COMPENSATION TEAM LIMITS REINSURANCE Personally-Owned 10-Year Level Term and ART Full Retention Levelized Schedule No Limit None Business/Team-Owned

39 click to edit master lead-in head underwriting niches and advantages For Financial Professional Use Only. Not for use with the general public.39 preferred classification available with personal history of cancer Better than Standard offers can be considered on a case-by- case basis for some cancers with very favorable prognosis. This would include: Melanoma-in-situ (Clark’s level 1 melanoma), without history of dysplastic nevi Papillary or mixed (papillary-follicular) carcinoma of thyroid Testicular seminoma Carcinoma-in-situ or CIN/dysplasia of cervix Carcinoma-in-situ of colon, without subsequent adenomatous polyps

40 click to edit master lead-in head underwriting niches and advantages For Financial Professional Use Only. Not for use with the general public.40 favorable factors for consideration of better than standard with personal history of cancer Non-smoker Early stage and early grade of tumor (in situ or stage I) at time of diagnosis and treatment Surgical treatment only (no radiation or chemotherapy) Current age 50 and up 10 or more years since cure of cancer Excellent follow-up and routine preventive health care

41 Click to edit master text style prostate cancer Early stage, low grade prostate cancers in older males are often Standard At ages 60 and up, non-apical, organ confined disease, Gleason 8 and lower, treated by prostatectomy, with favorable PSA’s for 5 years - may qualify for Standard! Age 66 and up, even with a PSA rise, AXA can offer on selected cases of biochemical relapse of Prostate Cancer For Financial Professional Use Only. Not for use with the general public.41 underwriting niches and advantages New! Transient increases of PSA that return to acceptable ranges on their own without any form of treatment will not be considered a relapse ti

42 click to edit master lead-in head Male, age 69 IUL, $3 million No coverage in force or applied for Prostatectomy at age 62 for adenocarcinoma of the prostate, Gleason score 7 Pre-surgery PSA (8) Annual follow-ups with PSA values <(0.1) 18 months ago, PSA rose to (0.2). At six-month recheck PSA was (0.3). With no further intervention, PSA dropped back to (0.1) one year ago Insurance blood profile PSA is stable at (0.1) Otherwise healthy individual taking no medications, normal blood pressures, lipids and family history. medical case study — prostate cancer For Financial Professional Use Only. Not for use with the general public.42 AXA offers Standard

43 click to edit master lead-in head underwriting niches and advantages For Financial Professional Use Only. Not for use with the general public.43 MGUS Monoclonal Gammopathy of Undetermined Significance is a condition in which a paraprotein (IgG, IgM and IgA ) is elevated in the blood. Occurs in 5% of those over age 70 AXA’s ability to provide more favorable offers has improved All cases of Multiple Myeloma are preceded by MGUS, but not all cases of MGUS will progress to Multiple Myeloma important Lower identified risk factors result in lower ratings!

44 click to edit master lead-in head Face Amount—$2,500,000, UL Male age 66, Non-smoker Otherwise healthy individual taking no medications, normal blood pressures, lipids and family history Diagnosed with MGUS a year ago when visiting his MD for a routine physical, he has remained asymptomatic. Extensive lab work included: Serum M-protein level < 3g/dl All IgG, IgM and IgA levels within acceptable ranges Bone marrow plasma cells were < 10% All IgG, IgM and IgA levels within acceptable ranges Bone marrow plasma cells were < 10% Urine M-protein < 1gm/day Physical exam favorable with absence of organ or tissue impairment related to myeloma medical case study - MGUS For Financial Professional Use Only. Not for use with the general public.44

45 click to edit master lead-in head medical case study — MGUS For Financial Professional Use Only. Not for use with the general public.45 AXA offers Standard w/Flat Extra $2.00/1000 Due to recent Medical Manual updates, AXA was able to give this client the most favorable rating of Standard with a Flat Extra of $2.00 per thousand. Prior to AXA’s MD Research and Manual updates, the Flat Extra could have been as high as $7.00 per thousand.

46 click to edit master lead-in head underwriting niches and advantages 46 rheumatoid arthritis Rheumatoid Arthritis (RA) is an autoimmune form of arthritis that causes pain, swelling, stiffness and loss of function in the joints. Can also affect eyes, mouth and lungs. Favorable cases are those in remission for more than 1 year, could now be Standard and eligible for Standard Plus via the Good Health Credit Program Will still consider someone on medication for better than standard if they meet all ACR Criteria Use of disease modifying Anti-Rheumatic drugs no longer considered an adverse factor in treatment of RA, leading to more aggressive offers. Lower identified risk factors result in lower ratings! For Financial Professional Use Only. Not for use with the general public.

47 click to edit master lead-in head Face amount: $5,000,000, IUL — Female, age 49, Nonsmoker Rheumatoid arthritis, diagnosed at age 46. Past treatment for depression, no longer on RX Minimal joint pain in hands and feet, no morning stiffness or swelling, started Methotrexate 2010-significant discomfort in left ankle. Rx Enbrel and Prednisone taper (10 mg/day for 3 days, then drop to 5 mg/day for 3 days, then discontinue) 2011-RA stable, no joint swelling, no pain other than shoulders, but appears to be due to muscle strain, not RA still taking Enbrel and Methotrexate, no swelling, no morning stiffness, no joint pain Satisfies all ACR criteria for remission for over 1 year. No additional debits for current or past medication usage Good Health Credits available for Cholesterol, No tobacco usage, Family History, Build, Blood Pressure, regular follow-up with MD. medical case study - rheumatoid arthritis For Financial Professional Use Only. Not for use with the general public.47

48 click to edit master lead-in head medical case study — rheumatoid arthritis For Financial Professional Use Only. Not for use with the general public.48 AXA offers Standard Plus Rheumatoid Arthritis in remission, even while on maintenance medications, including multiple Disease Modifying Anti-Rheumatic Drugs can qualify for better than Standard rates.

49 click to edit master lead-in head underwriting niches and advantages For Financial Professional Use Only. Not for use with the general public.49 EBCT results AXA looks at the whole case giving credit for favorable routine care and control of blood pressure and cholesterol and other coronary risk factors: Percentile 0 – 74: all Preferred levels available Percentile 75 – 89: can consider for Preferred or Standard Plus with normal imaging stress test, favorable risk factors, etc. Percentile 90+: Standard is best offer, with normal imaging stress test, favorable risk factors, etc. important A cardiac catheterization report remains the gold standard if done as part of the cardiac workup

50 click to edit master lead-in head Face Amount: $5,000,000, VUL Male age 65, Nonsmoker Treated Hyperlipidemia, Cholesterol ratio 4.5 Blood Pressure 120/80 EBCT score of 70th percentile All other risk factors favorable medical case study - EBCT For Financial Professional Use Only. Not for use with the general public.50 AXA offers Preferred Elite

51 click to edit master lead-in head underwriting niches and advantages For Financial Professional Use Only. Not for use with the general public.51 sleep apnea Sleep Apnea is a sleep disorder characterized by abnormal pauses in breathing or instances of abnormally low breathing during sleep. All Preferred classes are available with mild sleep apnea (AHI less than 20, O 2 saturation > 85%) All Preferred classes available on cases treated with effective CPAP therapy, with demonstrated compliance

52 click to edit master lead-in head underwriting niches and advantages For Financial Professional Use Only. Not for use with the general public.52 barrett’s esophagus Usually related to Chronic GERD. Treatment: Gastric suppression with proton pump inhibitor (PPI) Complications: Low grade dysplasia High-grade dysplasia Esophageal adenocarcinoma Higher incidence in males than females. Over age 45 is highest risk group. More cases can qualify for Standard and upgrade to Standard Plus via the Good Health Credit Program Resolution on endoscopy or biopsy may qualify for better offers

53 click to edit master lead-in head Male age 55, 5’10”, 200 lbs. Quit smoking 18 years ago $6,000,000, VUL and Term 20 coverage Family History: Father alive - age 77, Mother died at 71 of colon cancer Treated Hyperlipidemia, Cholesterol ratio 3.5 Blood Pressure 120/80 All other risk factors favorable Referred to gastroenterologist 3 years ago with worsening reflux symptoms not relieved by medication. An endoscopy was performed revealing Barrett’s Esophagus with no dysplasia. Follow up endoscopy this year confirmed Barrett’s Esophagus with no dysplasia medical case study – barrett’s esophagus For Financial Professional Use Only. Not for use with the general public.53 AXA offers Standard Plus

54 click to edit master lead-in head underwriting niches and advantages For Financial Professional Use Only. Not for use with the general public.54 bariatric surgery Significant, sustained weight loss over 2 years. Look for improvement in: hypertension diabetes diet and exercise important Cases can be considered for all levels of Preferred after two years based on the merit of the improvement, stability of the treatment, and its effects on all associated impairments

55 click to edit master lead-in head underwriting niches and advantages For Financial Professional Use Only. Not for use with the general public.55 aviation AXA Equitable offers Private Pilots the opportunity to qualify for all Preferred Classes for risks evaluated up to $3.50/1000 for their aviation activities Licensed private pilots with 100 or more solo hours and flying between 26 and 150 hours a year incur no extra premium assessment important Cases can be considered for all levels of Preferred with 100 or more solo hours and flying between 26 and 150 hours a year

56 click to edit master lead-in head AXA Equitable For Financial Professional Use Only. Not for use with the general public.56 what sets AXA apart? Here is what sets us apart from the competition… important marketing support high retention GHCP credit program underwriting expertise financial team medical directors

57 click to edit master lead-in head underwriting marketing support For Financial Professional Use Only. Not for use with the general public.57 Underwriting Case Studies Marketing Flyers My Business > Underwriting podcasts Brainsharks underwriting campaigns

58 thank you Please visit for more information 58G30859 For Financial Professional Use Only. Not for use with the general public.

59 This seminar is for informational uses only All guarantees are based on the claims-paying ability of AXA Equitable. This material should not be considered tax or legal advice. Clients should consult their own tax and legal advisors regarding their particular circumstances. © 2013 AXA Equitable Life Insurance Company. All rights reserved Avenue of the Americas, New York, NY 10104, (212) disclosure For Financial Professional Use Only. Not for use with the general public.


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