The National Conference of Insurance Legislators will hold a conference call today to discuss “investor-owned life insurance” and other life settlement topics.
A subcommittee at NCOIL, Troy, N.Y., is deciding whether NCOIL should revise or replace its current life settlement model, which is separate from the life settlement model adopted by the National Association of Insurance Commissioners, Kansas City, Mo., according to NCOIL Executive Director Susan Nolan.
NCOIL has been seeking comments about:
- The definitions of “fraudulent viatical settlement act” and “viatical settlement contract.”
- License and bond requirements for companies in the life settlement markets.
- Requirements for disclosures to viators and insurers.
- Practices that should be prohibited.
Groups planning to participate in the NCOIL conference call include the American Council of Life Insurers, Washington; the Life Insurance Finance Association, Atlanta; and Life Insurance Settlement Association., Orlando, Fla
Several groups will team to submit a joint letter supporting the NAIC model, says ACLI spokesman Whit Cornman.
Cornman says the groups submitting the joint letter will include the ACLI; the National Association of Insurance and Financial Advisors, Falls Church, Va.; the Association for Advanced Life Underwriting, Falls Church, Va.; and the National Association of Independent Life Brokerage Agencies, Fairfax, Va.
LISA Executive Director Doug Head, who plans to speak during the call, said his organization opposes IOLI transactions involving kickbacks and cases in which consumers have agreed before getting life insurance coverage to sell policies to buyers.
“We don’t want to see an improper act,” Head says.
But life insurers also should notify new contract holders that they have a right to know what the value of a contract would be if it were settled, Head says.
Head says he believes individual producers who belong to NAIFA are more supportive of LISA’s positions on life settlement model changes than NAIFA itself has been.
“NAIFA gets rolled all the time,” Head says. “I don’t think their members know what is being said in their name.”
NAIFA spokesman Jim Edwards says NAIFA goes to great lengths to educate its members on legislative and regulatory issues that affect their business and their clients.
“Many members are engaged in our advocacy activities,” Edwards says. “Any position NAIFA takes, for instance, must be approved by members on NAIFA’s policy formation subcommittee and board of trustees.”
About 90% of NAIFA members who participated in a recent survey said they trust NAIFA to take positions that are in their best interests, Edwards says.