A premium finance industry group is asking individual states to reject legislative changes proposed by the National Association of Insurance Commissioners.
The Life Insurance Finance Association, Atlanta, has put out a new statement emphasizing its strong opposition to recently adopted amendments to the NAIC’s Viatical Settlements Model Act.
NAIC approval came “despite the fact that the model was poorly drafted, did not meet the stated objectives of the regulators and was expedited without having fully considered the issues raised by all industry sectors,” says LIFA Executive Director Scott Cipinko.
Consumer groups also have come out against the model act amendments, Cipinko says.
“This is just unsettling,” Cipinko says. “The rights of the consumers were not actually considered, and the changes will impair the rights of many life insurance consumers that the model act was aimed at protecting.”
Members of the NAIC, Kansas City, Mo., adopted the changes to the viatical model in an effort to curb stranger-originated life insurance, or STOLI.
The National Conference of Insurance Legislators, Troy, N.Y., had asked the NAIC to hold off on passage of the changes until December, to give NCOIL a chance to debate its own proposed model act.
Under the new viatical model approved by the NAIC, policyholders with non-recourse premium financed policies would be barred from selling them on the secondary market for 5 years.
The NAIC model limits consumer choice, and it makes no exceptions for policyholders facing a financial hardship, Cipinko says.