An amended model act designed to curb stranger-owned life insurance was pulled back from full adoption by the National Association of Insurance Commissioners during its spring meeting here.
Changes to the Viatical Settlement Model Act were ready to be considered by the NAIC’s executive and plenary session. But North Dakota Insurance Commissioner Jim Poolman said the model would be held back so amendments could be added that would ensure it did not violate the National Bank Act and the Gramm-Leach-Bliley Act. Those amendments are being added to a bill currently in the North Dakota legislature and will be added to the model act, he said. Poolman had spearheaded changes to the existing model to address STOLI.
Commissioners expressed support for the model and its intent to protect consumers from life insurance policies that did not have insurable interest at the heart of the sale. It was urged that changes to the model be narrow in scope.
In comments before the executive and plenary, Poolman said he hoped the model could be brought back to them during the June summer meeting and adopted. He quipped that the extra time “would give everyone a little more time to lobby.”
Iowa Commissioner Susan Voss said: “I am very disappointed with some of the lobbying taking place. I hope in the future, we can keep discussions at a professional level.”
The current draft of the amended model is opposed by the life settlement and premium finance industries. There has been heavy lobbying by both these interests and the interests of life insurers at the state level. Most recently, all interests have lobbied both the Connecticut and North Dakota legislatures. During a March 6 hearing, Frank Keating, president and CEO of the American Council of Life Insurers, Washington, urged North Dakota legislators in the House to adopt a bill that resembles the current NAIC draft.