NU Online News Service, Dec. 17, 2003, 4:57 p.m. EST – The Viatical Settlements working group has sent a viatical settlements model to the Life & Annuities “A” Committee at the National Association of Insurance Commissioners, Kansas City, Mo., but the committee has put off voting on the model.[@@]
The model regulation is a tool states can use to implement principles included in a viatical settlement model act that the NAIC adopted in March 2001.
Regulators and insurers have worked on the viatical settlements model for 3 years, but they still face questions about licensing of life settlement brokers.
The model distinguishes between producers who sell life insurance and those who sell life settlements. A section of the model draws a line between the viatical components and the life insurance components of licensing examinations.
Other issues also need further review, according to Utah Insurance Commissioner Merwin Stewart.
Stewart said that he expects the NAIC to vote the model up or down during the spring NAIC meeting in March 2004, but that he does not want the “A” committee to “rubber stamp” the model.
“I am very disappointed that we are not prepared to adopt the model,” said Kentucky regulator Brian Staples. It is generally recognized that the licensing issue is holding the model up, Staples added.
Organizations that have expressed disappointment about the delay in consideration of the model include the American Council of Life Insurers, Washington; the National Association of Insurance and Financial Advisors, Falls Church, Va.; and SpreadtheRisk.org, Kansas City, Mo.
The model is the “best product” that could be developed for both consumers and insurers, said George Coleman, a representative for Prudential Financial Inc., Newark, N.J.
Regulators should impose separate licensing requirements on viatical companies because viatical companies are not selling life insurance, Coleman said.
Viatical companies are in a “factoring industry” related to the future cash flows that a policy will provide, Coleman said.