When the discussion of the AALU annual meeting’s Washington Report Session turned to the topic of investor-initiated life insurance, moderator David Stertzer found his 4 panelists speaking with one voice. The federal government, they said, should stay out of the debate.
“We’re better off letting the states address the [IOLI] issue,” said Kenneth Kies. “Our experience has been that when Congress steps into a debate, they tend to do it poorly. The AALU has appropriately taken a self-regulatory approach to the issue and demonstrated the industry can act responsibly.”
Marc Cadin agreed. “We prefer that [IOLI regulation] remain at the state level. We don’t want to raise the issue to any degree on Capitol Hill.”
Cadin added the AALU is not against life settlements or premium financing per se. But AALU member companies view life insurance policies that are purchased with the intent to sell to a life settlement company or third-party investor as “threatening” to the long-term tax treatment of the product. He noted, too, that AALU’s leadership is “spending a lot of time” in consultation with the NAIC, the 50 states and other industry organizations–including the ACLI, NAILBA and NAIFA–to promote changes in the model settlement laws that the industry can accept.