1. For Agent Use Only. Not to be used with the public. Working the Large Case Market: Retention/Reinsurance and Case Preparation Insurance products are issued by: John Hancock Life Insurance Company (U.S.A.), Boston, MA 02117 (not licensed in New York) and John Hancock Life Insurance Company of New York, Valhalla, NY 10595. © 2013 John Hancock. All rights reserved. MLINY110613041 Sue Pirog, AALU Managing Senior Underwriting Director

2. For agent use only. Not to be used with the public. 2 of 15 Case Preparation Jumbo management Medical Financial

3. For agent use only. Not to be used with the public. 3 of 15 Handling Jumbo Cases “More than ever before, Jumbo case underwriting relies heavily on mutual education and cooperation from all parties involved in the process – from solicitation to delivery, it should be a collaboration.”

4. For agent use only. Not to be used with the public. 4 of 15 Definitions Industry Jumbo Limits: –The total amount of inforce and pending formal applications – including life settlement coverage – with all companies, including ultimate increasing amounts; also includes all amounts that are being replaced, both internally and externally –Jumbo limit for U.S. residents is $65MM ages 0-80 –81-85 Jumbo is $50MM Reinsurance: –Insurance for insurance companies Retrocessionaire: –Insurance for reinsurance companies Total Line Coverage: –Total amount applied for and inforce with all companies

5. For agent use only. Not to be used with the public. 5 of 15 Retention: –The maximum amount of risk at a given age and underwriting classification that a company will retain on any one life Automatic Binding: –Ability to cede the risk to the reinsurer without the reinsurer having to evaluate the case. Limited by inforce, amount applied for with all companies and rating classification Facultative Cession: –Any case sent to a reinsurer to obtain an offer of coverage. Reasons for submission include medical, financial, aviation, avocation, occupation, capacity, excess of internal binding and Jumbo Limits Definitions (cont’d)

6. For agent use only. Not to be used with the public. 6 of 15 Retention Today’s marketplace –More companies hesitating to offer up their own retention on large-capacity cases –Some companies charge a premium –Some factors that reduce retention are age, mortality rating, aviation, avocation, occupation, foreign travel and residence How best to manage your cases? –Select a carrier that is: A leader in retention for all ages and products Allows flexibility; assists & partners with you in large case underwriting, will go the extra mile to assist with the sale

7. For agent use only. Not to be used with the public. 7 of 15 Managing Jumbo Add it up! - Personal, business, settled, IOLI, SOLI … it all counts - Total inforce all companies - Total applied for all companies - Replacements All business is considered when calculating the Jumbo limit By treaty a case exceeding Jumbo limits does not qualify for automatic cession and must either be kept within the company retention or sent for facultative consideration Reinsurers may be limited to their internal retention and have no retrocession support It’s important to understand a company’s position on 1035 & Replacement rules as it relates to their Jumbo definition

8. For agent use only. Not to be used with the public. 8 of 15 Managing Jumbo (cont’d) Consequences to the direct writer when Jumbo was exceeded at time of issue can be significant –May find they have no reinsurance support and be liable for the entire amount –Carriers may rescind the policy –Could they refuse to pay? How can you navigate the large case market? –Submit a detailed cover letter disclosing all inforce and applied for coverage. If there is a competing agent, include that information –Replacement and type of replacement can impact the amount of coverage available –Be clear if you want to keep the case out of the reinsurance marketplace

9. For agent use only. Not to be used with the public. 9 of 15 Case Preparation

10. For agent use only. Not to be used with the public. 10 of 15 Get As Much Information As Possible Upfront The affluent client is often very pressed for time so it’s crucial to obtain as much information up front as possible Ask about “ all” physicians consulted to include dermatologist, ENT, and other any specialist. Request names of medications prescribed Determine with the help of your underwriter if supporting documentation will be needed on financial cases –Particularly in large buy-sell cases, formal company valuation, and/or business financial statements are very helpful, so if possible obtain these up front

11. For agent use only. Not to be used with the public. 11 of 15 Purpose and Need We must understand the need and motivation for coverage: –Does it make sense? Once that is established we will look at the owner and beneficiary designation to support insurable interest Supporting information to substantiate the need, e.g.,: –What is the economic loss? –How is that loss determined? –Is the face amount consistent with the loss?

12. For agent use only. Not to be used with the public. 12 of 15 MVR Don’t forget to ask if the client has moving violations Often one of the last requirements to come in, and can sometimes change the offer at the last minute If there are any driving issues, be sure to bring it to the underwriters’ attention when informal is submitted

13. For agent use only. Not to be used with the public. 13 of 15 Internet Search Most carriers now will utilize the internet during the underwriting process and it can be helpful to you as well Useful for gathering financial information (e.g., Forbes listings, information regarding businesses such as recent mergers) Sometimes search will bring up adverse information that will help you address any issues before formal submission

14. For agent use only. Not to be used with the public. 14 of 15 More Helpful Hints Provide consistent information on the application, financial statement(s), cover letter and tele-interview Provide breakdown of all inforce coverage and increasing riders, including settled and sold policies Complete financial profile disclosure (i.e., cover letter and Financial Supplement) Discuss unique medical or financial aspects of the case up front with your underwriter Set expectations. Walk client through the formal process so they know what to expect, including script check, telephone interview, MVR

15. For agent use only. Not to be used with the public. 15 of 15 Questions? Talk to your John Hancock Underwriters on your next large case!