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Life Health > Life Insurance

Groups Comment On NAIC Viatical Draft

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The National Association of Insurance Commissioners has received a new batch of comment letters about efforts to update the viatical settlements model act.

The commenters filed the letters in anticipation of the April 2 NAIC Life Insurance and Annuities Committee meeting.

One key group, the American Council of Life Insurers, Washington, is on record supporting the model.

In its comment letter, the ACLI stuck with offering technical comments about provisions addressing how the model would apply to banks.

In other comment letters:

- The Life Insurance Settlement Association, Orlando, Fla., and the Life Settlement Institute, Hudson, Ohio, suggest focusing amendments to specifically address the NAIC charge to look at investor-initiated life insurance through a subcommittee or working group, to permit input from all parties.

- The National Association of Independent Life Brokerage Agencies, Fairfax, Va., and 2 other groups, the Association for Advanced Life Underwriting, Falls Church, Va., and the National Association of Insurance and Financial Advisors, have recommended changing model language to reflect “legitimate life insurance and life settlement arrangements, by allowing sale after 2 years if someone with insurable interest puts up his or her own money or collateral and there is no [stranger-owned life insurance]-oriented agreement.” The groups further suggest that current wording indicating that “neither the insured nor the policy has been evaluated for settlement” is too broad and would have a “harmful impact” on legitimate life settlements.

- The Life Insurance Finance Association, Marietta, Ga., says imposing a 5-year prohibition on life settlements rather than a 2-year prohibition will not stop STOLI. LIFA also is urging the NAIC to look at the use of trusts to initiate STOLI transactions.

- The Institutional Life Markets Association is a new group that does not list its address but describes itself as comprised of the “world’s leading institutional investors and intermediaries in the mortality and longevity marketplace.” ILMA has recommended deleting a provision requiring disclosure to a viator of the amount and method of the provider’s compensation. Additionally, ILMA recommends wording that would require an insurer to respond to a request for verification of coverage within 30 days of the request, in order to “create certainty around settlement transactions.”


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