NU Online News Service, June 4, 2004, 3:37 p.m. EDT – Maine Gov. John Baldacci has signed a bill that will let state residents who are not seriously ill sell their life insurance policies.[@@]
Before Baldacci, a Democrat, signed the bill, L.D. 1907, Maine already had a viatical settlement law that let insureds suffering from “catastrophic or life-threatening” health problems sell policies. L.D. 1907 amends the law to let life settlement companies buy policies from healthy older insureds and other insureds who would rather sell their policies than surrender the policies for the policies’ cash value.
The amended law requires that insurance advisors tell policyholders about alternatives to life settlements and about the tax and legality of life settlements. Life settlement companies also must give policyholders a chance to back out of the settlement agreements.
Some insurers have argued that licensed insurance agents should get life settlement licenses before serving as life settlement advisors. But the Maine law lets licensed life insurance agents negotiate settlements without getting life settlement licenses, according to the bill text.
The amended life settlement law will take effect in August.
L.D. 1907 was introduced by Rep. Christopher O’Neil, D-Saco, Maine, and Sen. Arthur Mayo III, R-Sagadahoc County, Maine.
Maine lawmakers based L.D. 1907 on a model developed by the National Association of Insurance Commissioners, Kansas City, Mo.
The Life Insurance Consumers Alliance, Washington, a life settlement group, supported the idea of expanding Maine residents’ life policy resale rights and has welcomed the signing of L.D. 1907.
“Life settlements are an important alternative to the traditional means of disposing of an underperforming life insurance policy,” LICA Executive Director James Butera says in a statement about the signing.
Links to the text of the bill and other information about the bill are on the Web at http://www.mainelegislature.org/legis/bills/ld.asp?LD=1907