Sioux State Lawmakers Tackle Life Settlements

Under the North Dakota bill, a violation would result if a person entered into a settlement transaction before the application or issuance of a policy or within 5 years starting with the date of issuance of the policy.

There would be exceptions if it could “conclusively be shown by the viatical settlement provider” that certain conditions existed, according to the bill text.

Some of those conditions include: terminal or chronic illness; death of the viator’s spouse; divorce from the viator’s spouse; retirement from full-time employment; or physical or mental disability that prevented full-time employment.

The bill’s disclosure section includes a requirement that the viatical settlement broker or provider inform a potential viator that there are alternatives to settlements, including accelerated death benefits or policy loans.

The National Conference of Insurance Legislators, Troy, N.Y., is working on its own life settlement model. The group of NCOIL legislators looking at the issue is being headed by North Dakota state Rep. George Keiser, R-Bismarck, N.D.

Groups praising the North Dakota Senate for passing S.S. 2268 include the American Council of Life Insurers, Washington; the Association for Advanced Life Underwriting, Falls Church, Va.; and the National Association of Insurance and Financial Advisors, Falls Church.