Legislation in North Dakota addressing investor-owned life insurance and suitability of annuity transactions has advanced in the state legislature.
The viatical bill, SB 2268, came out of a House insurance committee on March 21 with a ‘Do Pass Recommendation.’ At press time, the bill was potentially scheduled to go to the full House floor on March 22, according to a source.
SB 2268 was unanimously passed in the North Dakota Senate and had a hearing in the House on March 6 that drew testimony from both life settlement representatives and life insurance representatives. Gov. Frank Keating, president and CEO of the American Council of Life Insurers, Washington, was among those who testified before legislators.
This version of the bill closely resembles amendments to a model act crafted at the National Association of Insurance Commissioners, Kansas City, Mo. That amended model, the Viatical Settlement Model Act, include a 5-year ban on the sale of life insurance contracts with certain life event exceptions.
The model is being held back from full adoption for more work, though initially it had been expected to be adopted during the NAIC’s spring meeting earlier in March. However, North Dakota Insurance Commissioner Jim Poolman, a member of the Life & Annuities “A” Committee who led in the bill’s development, asked that the model be delayed so additional wording addressing how it impacts banks could be added.
The National Conference of Insurance Legislators, Troy, N.Y., is considering its own solution to investor-owned life insurance, spearheaded by NCOIL member and North Dakota State Rep. George Keiser, R-41 District.
The prime sponsor of the North Dakota viatical bill was State Senator Jerry Klein, R-Fessenden, also an NCOIL member.
The American Council of Life Insurers, Washington, said the bill is “a great leap forward” in addressing STOLI.
Separately, a bill addressing the suitability of annuity sales, SB 2155, was passed by the House and returned to the Senate, where it will be passed on to North Dakota Governor John Hoeven for his expected signature. In North Dakota, bills usually are passed into law Aug. 1. The bill’s primary sponsor was State Sen. Nicholas Hacker, R-Grand Forks.
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 its development.
The model has been adopted in 15 states and is being proposed in 11 states, according to an ACLI tally. Those states that have enacted the model include: Alabama, Arizona, Colorado, Georgia, Iowa, Kansas, Louisiana, Massachusetts, Michigan, Nevada, Ohio, Oklahoma, Rhode Island, Utah and Virginia.