The Life Insurance Settlement Association has retracted its attack on insurers regarding Oklahoma State University’s plan to collect $250 million by insuring the lives of 25 supporters, but not before igniting a bitter war of words between LISA and the American Council of Life Insurers over the transaction.
The Stillwater, Okla., school expects to raise $250 million for its athletic fund through the “Gift of a Lifetime” program, which came from one of its alumni, T. Boone Pickens. Pickens, the founder and chairman of Dallas-based BP Capital, along with Sherman Smith, recently donated $200 million for the construction of new athletic facilities for OSU.
“Our initial discussions with Boone on this subject quickly shifted from a ‘what if?’ to a ‘why not?’ conversation,” said OSU athletic director Mike Holder. “One thing led to another and we sought guidance of top insurance experts to research the idea. This program is evidence of our loyal supporters’ willingness to embrace new ways to help their university by leaving a lasting legacy that will benefit OSU Cowboys and Cowgirls for generations to come.”
LISA Executive Director Doug Head initially sounded the alarm regarding the program, calling it the “height of hypocrisy” for life insurers to support such a mechanism while opposing other secondary market transactions and funding mechanisms.
Upon learning more about the program, however, Head said, “Based on new information that we have obtained,” the group is satisfied that the OSU program does meet the standard for insurable interest.
“We now understand from these life insurance producers that the recent OSU charitable life insurance program is not what LISA considers to be stranger-initiated life insurance, a misuse of life insurance where only investors stand to reap substantially all of the death benefits of life insurance purchased by charities,” Head asserted, adding that LISA “regrets the errors” of its initial statement questioning the program’s validity.