Legislators are preparing for a full-day work session on October 25 to advance a life settlement model and get it ready for full adoption at the annual meeting of the National Conference of Insurance Legislators in Las Vegas next month.
NCOIL’s one-day session in Chicago will focus on strengthening the current draft of the Life Settlements Model Act in 3 areas, according to Rep. George Keiser, R-Bismarck, N.D., which are: Making sure life settlements associated with trusts are covered, ensuring transparency, and establishing penalties for violations of the act.
The October session will be followed by a full-day session on November 14 in anticipation that the model will be received and adopted by NCOIL’s executive committee, he explains.
The NCOIL draft contains a 2-year ban on the sale of contracts rather than a 5-year moratorium. Keiser says a 5-year ban with exceptions can actually encourage settlement of contracts.
The meeting this week will start off with a discussion of language that will clarify what insurance regulators handle and what securities regulators oversee, he adds. Then, more work will be done on the trust issue to make it stronger, Keiser continues.
The NAIC model, which was adopted in North Dakota, creates a dual system of oversight and will need to be amended to address that issue, Keiser explains.
In preparation for the meeting, interested parties are filing comments and position statements.
Among the comments was a joint letter from the American Council of Life Insurers, Washington, and the National Association of Insurance and Financial Advisors and the Association for Advanced Life Underwriting, both in Falls Church, Va.
In a letter dated Oct. 12, the groups offer amendments that they maintain address the three NCOIL goals, calling them “fundamentally important.”
In an Oct. 17 release, these organizations urged NCOIL to refine its draft, noting their support for a 5-year ban on the sale of contracts.