Close Close
ThinkAdvisor

Life Health > Life Insurance

Market Conduct, Viatical Models Top NAIC Agenda

By Jim Connolly

X
Your article was successfully shared with the contacts you provided.

NU Online News Service, June 9, 2004, 2:29 p.m. EDT – The Market Conduct Surveillance Model Act and a stripped-down viatical settlement model could come up for a vote at a plenary session of the National Association of Insurance Commissioners.[@@]

The Kansas City, Mo., group is getting ready to start its summer meeting in San Francisco. NAIC meeting plenary sessions give all commissioners a chance to vote on proposed NAIC models.

NAIC Secretary-Treasurer Joel Ario says the NAIC has based its market conduct model draft on a model adopted in February by the National Conference of Insurance Legislators, Albany, N.Y.

But NCOIL says the NAIC has made substantive changes in its model, not just technical changes.

The other hot model, the viatical settlement model, probably will exclude a provision that might have required life insurance agents to get a separate viatical broker license before handling viatical settlement transactions.

Frank Keating, president of the American Council of Life Insurers, Washington, sent a letter to the commissioners expressing his concerns about the viatical settlement draft June 7, says Bruce Ferguson, a senior vice president at the ACLI.

Keating says the NAIC model ought to include separate viatical licensing requirements. The “significance of these transactions should be reflected in the qualifications demanded of the brokers who solicit viatical settlements,” Keating writes in the letter.

Viatical settlement transactions are complex actions, and brokers need to understand issues such as the tax consequences of these transactions, Ferguson says.

A separate licensing requirement had been in earlier versions of the model, but life settlement companies argued that requiring a separate license would hinder contract holders’ efforts to sell their policies. The Life & Annuities “A” Committee voted to remove the provision.

The ACLI can support the NCOIL viatical settlement model because that model includes a separate viatical broker licensing provision, Ferguson says.