M. Bryan Freeman, president of the Life Insurance Settlement Association board, says changes to insurable interest laws should not be disguised as changes in life settlement law.
Freeman made that statement as LISA, Orlando, Fla., released a position statement on insurable interest.
LISA “supports the long-standing concept of ‘insurable interest’ and the requirement that the policyholder has an insurable interest in the insured’s life at the time a life insurance policy is issued,” LISA says in the position statement. “This concept protects insureds, policy owners, beneficiaries, life insurance companies, life insurance settlement companies and provides integrity to life insurance products.”
LISA “is and always has been opposed to investor-initiated life insurance transactions that are intended to circumvent insurable interest law,” LISA says.
“Legitimate premium finance loan transactions can be a useful means by which the costs of paying for life insurance can be properly financed,” LISA adds. But LISA says it “opposes loans that attempt to use the life settlement transaction to validate illegitimate premium financing transactions.”
Although LISA supports compliance with insurable interest laws, “we don’t believe the settlement law is the appropriate place to deal with these issues,” says LISA Executive Director Doug Head.