NU Online News Service, June 9, 2004, 3:02 p.m. EDT, Washington – Life insurers are working to prevent attempts in several states to loosen insurance interest standards, American Council of Life Insurers President Frank Keating says.[@@]
In response to questions raised by 2 members of the U.S. Senate Finance Committee, Keating says the ACLI strongly opposes efforts to expand insurable interest laws to permit unrelated third-party investors to receive life insurance death benefits.
Opposition from the life insurance industry blocked legislation from being enacted in Alabama, Florida, Maryland, Oklahoma and South Carolina, Keating says.
He adds that the ACLI is actively opposing legislation that is pending in Louisiana and New York.
Keating’s letter responds to concerns raised by Sens. Gordon Smith, R-Ore., and Kent Conrad, D-N.D.
In a letter to Keating, the senators say the type of legislation being considered “may weaken state insurable interest laws to the point they will not longer serve any meaningful purpose.”
Specifically, Smith and Conrad say, the state legislation that concerns them is designed to facilitate marketing programs through which charitable, educational and religious institutions work with third-party investors to solicit individuals to participate in investments.