Life insurers won a victory against life settlement companies here at the recent summer meeting of the National Conference of Insurance Legislators, Albany, N.Y.[@@]
Life settlement companies wanted NCOIL to amend a life settlement model law so that it would require insurers to notify policyholders about the existence of the life settlement option.
Life insurers vehemently opposed the measure, arguing that they should not have to advertise the life settlement companies’ services.
“The mandatory notice requirement is without precedent,” said a representative for the American Council of Life Insurers, Washington. “Insurers should not be required to publish notice suggesting eligibility for a product for which many policyholders will not be eligible and about which insurers cannot answer questions.”
Life settlement companies buy life benefits from policyholders at a discounted price. The companies once focused on buying policy benefits from terminally ill patients, but they have responded to the success of new AIDS drugs by shifting to buying benefits from policyholders who are over 65 and have life expectancies of 4 to 15 years.