State legislators are promising a thorough look at the issue of life settlements as they weigh what steps to take to curb the sale of life insurance policies specifically purchased only to be resold again.
Susan Nolan, executive director of the National Conference of Insurance Legislators, Troy, N.Y., said a first discussion on Jan. 5 included the full NCOIL subcommittee of 7 legislators and 25 interested parties.
NCOIL had asked for comment on the National Association of Insurance Commissioners’ draft of its amended Viatical Settlement Model Act. That draft is expected to be reviewed by the executive committee and plenary of the NAIC during its spring meeting in March.
State representative Ron Crimm, R-Louisville, Ky., one of the participants on the call, says he is viewing the issue as both an NCOIL representative and as a producer with over 40 years’ experience.
Crimm says that as a producer it seems as if a lot of paperwork would be created by requirements in the model.
Another point he says needs more discussion concerns bond requirements for producers in the draft. If a producer has a couple of million dollars in errors and omissions coverage, Crimm wonders why a bond requirement would be necessary. Why can’t there be a requirement for one or the other? he asks.
The current NAIC draft states that a commissioner can issue a license if, among other things, it is found that a viatical settlement provider has “demonstrated evidence of financial responsibility” through either a surety bond or a deposit of cash, certificates of deposit or securities, or a combination, in the amount of $250,000.