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September 12, 2006 at 01:22 PM
Life insurance and life settlement industry representatives sparred here over a new Viatical Settlement Model Act draft.
The draft was developed by Jim Poolman, North Dakota insurance commissioner, who is the chair of the Life Insurance and Annuities Committee at the National Association of Insurance Commissioners, Kansas City, Mo.
Poolman’s draft would let a policyholder who experiences a major life change, such as a divorce, sell a policy before the end of the usual 5-year “moratorium” period.
Life insurance industry representatives who spoke here during a Life Insurance and Annuities Committee session at the NAIC’s fall meeting attacked “stranger-owned life insurance,” while life settlement and consumer group representatives complained that the proposed 5-year moratorium would hurt consumers by killing the “secondary market,” or resale market, for life insurance policies.
Michael Lovendusky, a representative for the American Council of Life Insurers, Washington, said the ACLI and 3 other groups — the Association of Advanced Life Underwriters, Falls Church, Va.; the National Association of Insurance and Financial Advisors, Falls Church, Va.; and the National Association of Independent Life Brokers and Agents, Fairfax, Va. – have been supporting a proposal to require almost all life policyholders to keep policies 2 years before selling them.
But the narrower 5-year moratorium proposal in the Poolman draft is worth considering, Lovendusky said.
