As a national group of insurance legislators prepares to vote on a life settlements model act, several members have taken campaign contributions from stakeholders in the model’s development and passage, state records show.
The National Conference of Insurance Legislators, Troy, N.Y., is in the final stages of developing its Life Settlements Model Act. It will hold a meeting about the model on Oct. 25 in Chicago and will meet again Nov. 14, just before its annual meeting in Las Vegas.
Legislators developing the model hope the NCOIL will approve it at the annual meeting, George Keiser, R-Bismarck, N.D., chair of the Life Settlements subcommittee, tells National Underwriter.
Life settlements involve the sale of life insurance policies to a third party. They have become the focus of considerable discussion because the initial concept of life settlements has evolved, with some individuals allegedly buying life policies with the intent to sell them in the near future to a settlement firm.
Filings listed on state Web sites indicate that several members of the subcommittee have accepted campaign contributions from stakeholders in the model’s development.
Records show that 4 members of the 11- member subcommittee developing the life settlement model law have accepted campaign contributions from parties that could be affected by the model.
The state legislators are: Rep. Robert Damron, D-Ky.; Rep. Robert Godshall, R-Pa.; Sen. Ralph Hudgens, R-Ga.; and Sen. James Seward, R-N.Y.
State election Web sites indicate the following campaign contributions:
Rep. Damron–received 2 campaign contributions from Alan Buerger, CEO of Coventry First, Fort Washington, Pa. The first contribution was made on Nov. 14, 2005 for $1,000, with a second donation of $1,000 on Aug. 14, 2006. A $1,000 donation was also made by Constance Buerger, CFO of Coventry First on Nov. 14, 2005.
Rep. Godshall–A $1,500 donation was made by Alan and Constance Buerger on April 17, 2007. On the same date, a $1,000 contribution was made by Michael Freedman, listed as senior vice president of Coventry First.
Sen. Hudgens–A $1,000 campaign contribution was made by Coventry First on Oct. 11, 2005. On Dec. 2, 2005, a $500 campaign contribution was made by Prudential Financial, Newark, N.J.; and on Dec. 5, 2005, the American Council of Life Insurers, Washington, made a $500 contribution.
Sen. Seward–2006 donations from the Life Insurance Council of New York, totaling $6,697.44; 2005 LICONY contributions totaling $6,000; and a $2,000 Oct. 20, 2006 contribution from Habersham Funding LLC, Atlanta.
Responding to questions about the contributions, Susan Nolan, NCOIL executive director, said that NCOIL has no policy on committee members recusing themselves from deliberations nor does it have a conflict-of-interest policy, because each legislature is bound by campaign and ethics laws in that legislator’s home state. She said that she could not predict whether NCOIL would develop a conflict-of-interest policy in the future.
Keiser, chair of the life settlements subcommittee, commented that during an election cycle, it is usual for a legislator to receive legal contributions from entities that are involved in work on committees that he works on. But this would never affect an individual’s vote, he said.
Keiser is not listed on his state’s Web site as having taken contributions from any stakeholders in the life settlements issue.
Keiser and several other legislators distinguished between regular election cycle contributions and excessively large contributions in off-election cycle years.
Keiser said he believes in the integrity of the other legislators on his subcommittee and does not think that campaign contributions would affect the model’s development.
Damron responded by saying that all donations he received followed Kentucky law and that in the last election cycle he had raised approximately $150,000. He notes that he has taken contributions from a variety of parties in the industry and maintains that it would “not at all” affect his vote.
Damron explained that he believes consumers should have the right to settle their life contracts and that if a contract is surrendered or lapses, the true value is not realized. The NCOIL model is a “pretty good model,” he asserted.
Hudgens said that he has taken legal contributions from stakeholders, including a $1,000 contribution from the National Association of Independent Life Brokerage Agencies, Fairfax, Va., in June. He said that he raised around $125,000 to $130,000 in the last election campaign.
He also confirmed that he had accepted a flight on Coventry’s private jet to reach an NCOIL meeting last year on life settlements at Crystal City, Va. Hudgens explained that a Georgia Senate session had met until after midnight and that Coventry had offered him transportation so that he would be able to get to the NCOIL meeting. Without such transportation, it would have been impossible for him to participate, Hudgens said.
At press time, Rep. Godshall and Sen. Seward could not be reached for comment.