Viatical Model Screeches To A Halt

Reflecting the questions being raised to legislators, the National Conference of Insurance Legislators, Troy, N.Y., is embarking on efforts to develop its own model. The efforts follow numerous questions ranging from property rights to the inclusion of settled contracts in trusts. These questions were raised during NCOIL’s spring meeting.

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. This is not an efficient way, in my opinion, to operate.”

During the Life and Annuities “A” committee session that immediately followed, Kentucky Director Julie McPeak, chair, said she would like to see the model discussed during a full-day meeting and changes made so that it could be taken up by the executive and plenary in June. In response to a question from Iowa’s Voss, McPeak said she was “interested in keeping the amendments to a minimum” but would consider “constructive, substantive amendments” in addition to the bank amendments. She expressed confidence that she “has not seen any additional amendments that make more sense” than the language in the current draft.

All sides said Poolman’s announcement took them by surprise. Life settlement and life premium finance representatives called it “the right thing to do.” These industries have been calling for more discussion on the issue and remedies that they say specifically address STOLI.

Michael Lovendusky, a representative with the American Council of Life Insurers, said the ACLI supports the current draft, calling it “a sophisticated response to a number of complex problems.” He said the ACLI does not anticipate asking for additional amendments to address other problems in the secondary market. While there are “clearly other issues to address, the idea of a single silver bullet to address problems is simple-minded.”