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March 18, 2004 at 07:00 PM
By
New York
Producers who also broker viatical settlement contracts will not have to obtain a separate license if a change to a model regulation is fully adopted by the National Association of Insurance Commissioners.
During the spring NAIC meeting here, an amendment to the Viatical Settlements model regulation, under consideration since 2001, was affirmed by NAICs Life & Annuities “A” committee. The draft will now go up for a vote in June at the NAICs executive committee and plenary. The regulation was developed to implement NAICs Viatical Settlement model act.
The amendment, introduced by Carroll Fisher, Oklahoma insurance commissioner, states that if a person is licensed as a resident or non-resident life insurance producer for at least a year, that individual can operate as a viatical settlement broker.
The amendment was opposed by the life insurance industry, supported by viatical settlement companies and had mixed support from producer groups.
Life insurers said the model should be adopted without the change, meaning separate licenses would be required.
Failure to require separate licensing would create a blurring of lines between an industry focused on providing protection and one focused on making a profit from the purchase of life insurance contracts, said Lynn Boyd, senior director of long term care issues with the American Council of Life Insurers, Washington. Insurers could be held responsible if there is no clear line between the 2 types of services, she added.
Life insurers offer protection and financial security, but viaticals are factoring companies, making a profit on the spread between the purchase price and the face amount paid out upon the death of the viator, said George Coleman, vice president-government affairs and external affairs with Prudential Financial, Newark, N.J.
