Life Settlement News

Today, Russel Dorsett, President of the Life Insurance Settlement Association (LISA), released the following statement:

The Life Insurance Settlement Association announced the passage of a new law in New York that establishes comprehensive regulation of Life Settlements in that state. The new law introduced at the request of the New York State Insurance Department by Senator Neil Breslin (S66009) and Assemblyman Joseph Morelle (A40009), is based on the National Conference of Insurance Legislators (NCOIL) Life Settlement Model Act.

Illinois Governor Pat Quinn has signed a new law prohibiting stranger-originated life insurance transactions.

The Financial Industry Regulatory Authority Inc. might issue guidance in coming weeks regarding fees firms can charge for life settlement transactions, a Finra executive said today in Boston at the agency’s annual meeting.

Revised NCOIL-based legislation will be brought up in next session

New York, one of just 10 states where life settlements are unregulated, is unlikely to see a law governing the business until January, when legislators reconvene for their next full session. In June, state lawmakers adjourned without passing legislation that closely followed a model act drafted by the Washington-based National Conference of Insurance Legislators. An earlier bill, proposed by the state’s insurance department and containing a controversial requirement that investors in life settlements register with the department, had been scrapped.

The Kentucky House of Representatives has taken an important
step to protect life insurance consumers with a ban on stranger originated life insurance (STOLI) schemes,
according to the Life Insurance Settlement Association. HB 348, unanimously passed last week, protects
consumers by succinctly and directly prohibiting initiation of life insurance for wager purposes—without rolling
back a policy owner’s property right to gain or utilize the market value of a properly initiated policy as he sees
fit.

The Life Insurance Settlement Association (LISA) today renewed its objections to the recent amendments to the NAIC Viatical Settlement Model Act, after it was revealed that both the primary author of the model and its key supporter, the American Council of Life Insurance (ACLI), knew that the model act failed to address the problem of stranger originated life insurance (STOLI). LISA has repeatedly raised concerns about the highly unorthodox process and closed-door tactics which were used to develop and adopt the amendments and has held firm that the model does not stop what the NAIC has already identified as the improper manufacturing of life insurance.

The Life Insurance Settlement Association announced its strong support today for the recently introduced bill in the District of Columbia City Council to regulate life settlements in that jurisdiction. This legislation, introduced at the request of the D.C. Department of Insurance, Securities, and Banking, comprehensively protects life insurance policyowners by imposing tough licensing requirements on settlement providers and brokers and thorough oversight of interactions with consumers, including an important new set of disclosures and affirmations designed to buttress insurable interest requirements and prevent STOLI (stranger originated life insurance).

The National Association of Insurance Commissioners (NAIC) today adopted amendments to the Viatical Settlements Model Act during the Association’s Summer National Meeting in San Francisco.

An Association for Advanced Life Underwriting official would like to see regulators at the National Association of Insurance Commissioners change the NAIC’s proposed life settlements model revision.