NU Online News Service, April 8, 2004, 6:02 p.m. EDT – Life insurers are protesting a decision that might let licensed life insurance agents act as viatical brokers without obtaining separate licenses.[@@]
A committee at the National Association of Insurance Commissioners, Kansas City, Mo., voted in March to remove a provision from the Viatical Settlement model regulation that would have required agents to get separate licenses before they could serve as viatical brokers.
The NAIC’s executive committee and plenary have not yet considered the model.
Frank Keating, president of the American Council of Life Insurers, Washington, has sent all commissioners a letter that urges them to restore the original viatical broker licensing provision.
“It is both illogical and dangerous to assume that a licensed life insurance agent, without being first educated and trained, can correctly answer consumer questions regarding the particulars of viatical settlement transactions, such as the tax consequences and impact on government benefits eligibility,” Keating writes in the letter.
In addition to sending the letters, the ACLI is asking the NAIC’s executive committee to restore the original viatical broker licensing provision.
An NAIC working group spent years developing the Viatical Settlement model.
Companies in the viatical industry have maintained that a separate viatical broker licensing requirement is unnecessary and would discourage the business of viatication. They argue that the agent who initiated the purchase of life insurance knows the consumer best and should see that consumer through any decision to viaticate a contract.
Life insurers, on the other hand, maintain that the viatical brokerage business is very different from the life insurance business and ought to have separate licensing requirements.