Members of the National Association of Insurance Commissioners plan to wait at least until June to vote on adopting model changes that could affect the “stranger-owned” life insurance market.
The executive committee of the NAIC, Kansas City, Mo., and the plenary–the body that represents all voting NAIC members–were ready to consider proposed changes to the Viatical Settlement Model Act here at the group’s spring meeting.
But regulators decided to revise the model changes to ensure that they comply with the National Bank Act and the Gramm-Leach-Bliley Financial Services Modernization Act, according to North Dakota Insurance Commissioner Jim Poolman.
The revisions are being added to a bill now in the North Dakota legislature, and they also would be added to the model act, Poolman said.
Poolman has led efforts to update the NAIC’s viatical model to address STOLI, or arrangements in which investors help consumers pay for life insurance policies in exchange for a share of the death benefits.
Commissioners expressed support for the STOLI update effort and asked that any changes in the update be narrow in scope.
The delay in consideration of the changes by the NAIC’s executive and the plenary will “give everyone a little more time to lobby,” Poolman quipped.
“I am very disappointed with some of the lobbying taking place,” Iowa Commissioner Susan Voss said. “I hope in the future we can keep discussions at a professional level.”
The life insurance industry supports the model update draft, and the life settlement and premium finance industries oppose it.
Representatives from all 3 industries have been lobbying the Connecticut and North Dakota legislatures on the update.
Frank Keating, president of the American Council of Life Insurers, Washington, urged during a March 6 hearing that members of the North Dakota House adopt a bill that resembles the current NAIC draft.
Michael McRaith, Illinois insurance director, said he was not sure why the bank amendments were not addressed during the executive and plenary session.
“This is a very serious consumer issue and we need to deal with this promptly,” McRaith said. “This is not an efficient way, in my opinion, to operate.”
During a Life Insurance and Annuities Committee session, Julie McPeak, the chair, said she would like to have a revised model update ready for consideration by the executive and plenary in June.
McPeak said she is “interested in keeping the amendments to a minimum” but will consider “constructive, substantive amendments” in addition to the bank amendments.
McPeak noted that she “has not seen any additional amendments that make more sense” than the language in the current draft.