The North Dakota House Insurance Committee has approved a viatical settlements bill that would require most consumers to hold a policy for at least 2 years and, in many cases, 5 years before selling the policy.
The committee gave the bill, S.B. 2268, a “do pass recommendation” Wednesday.
At press time, no word was available about whether the bill had gone to the floor today.
The North Dakota Senate passed S.B. 2268 45-0 in February.
Frank Keating, president of the American Council of Life Insurers, Washington, was one of the witnesses who appeared March 6 at a House hearing on the bill.
The version of the bill that the North Dakota House Insurance Committee approved closely resembles amendments to a Viatical Settlements model act crafted by the National Association of Insurance Commissioners, Kansas City, Mo.
The amendments would require most consumers to hold life policies for at least 2 years unless they had experienced major life changes, such as a divorce or an accident causing a major disability.
The amendments also would require consumers to hold policies for at least 5 years if they had used encumbered assets other than the cash value of a policy to pay for a policy, or if they or their policies had been evaluated for settlement.
North Dakota has played a key role in shaping the NAIC’s work on its model amendments.
North Dakota Insurance Commissioner Jim Poolman, chair of the NAIC’s Life Insurance and Annuities Committee, has been one of the leaders of efforts to develop the viatical model amendments.
The NAIC held back on approving the amendments earlier this month after Poolman asked for time to add revisions concerning the effects of the proposed amendments on banks.
The National Conference of Insurance Legislators, Troy, N.Y., is reviewing its own life settlement model.
The NCOIL member spearheading that effort is North Dakota State Rep. George Keiser, R-Bismarck, N.D.
The lead sponsor of the North Dakota viatical bill, state Sen. Jerry Klein, R-Fessenden, N.D., is also an NCOIL member.
The ACLI says S.B. 2268 is “a great leap forward” in efforts to address concerns about “stranger-owned” life insurance arrangements.
In related news, members of the North Dakota House voted 71-20 Monday to approve S.B. 2155, a bill concerning the suitability of annuity sales.
The state Senate approved S.B. 2155 in January.
The House now is returning the bill to the Senate.
Observers expect the Senate to pass the bill to North Dakota Gov. John Hoeven, a Republican, for his signature.
The lead sponsor of S.B. 2155 is state Sen. Nicholas Hacker, R-Grand Forks, N.D.
The bill is based on the NAIC’s Senior Protection in Annuity Transactions Model Regulation.
The model, initially for those age 65 and over, was amended to offer protections to all consumers.
Poolman spearheaded the development of the expanded model.
The model has been adopted in 15 states and is being proposed in 11 states, according to an ACLI tally.
States that have enacted the model include Alabama, Arizona, Colorado, Georgia, Iowa, Kansas, Louisiana, Massachusetts, Michigan, Nevada, Ohio, Oklahoma, Rhode Island, Utah and Virginia.